RAJASTHAN STATE MINES & MINERALS LTD., Jaipur V. ACIT, Jaipur

ITA 253/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2067 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VARIENDAR MEHTA CIT DHK
• Keywords: Business income; Depreciation; Diversion of income; Earning of tax free income; Retrospective amendment; Corroborative evidences; Tax effect; Capital receipt; Reason to believe; Revenue expenditure; Capital expenditure
• Section: 43B; 14A; 37(1); 32; 147; 27; 148; 37; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 253/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 295/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 769/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 804/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. THE ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT 2 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. VK;DJ VIHY LA-@ ITA NO. 254/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 296/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 255/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 297/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 256/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, CUKE VS. THE JOINT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. 3 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 298/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 257/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 299/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. THE DY . COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1028/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, LAL KOTHI, JANPATH, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1097/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. 4 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THE ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE MINES, & MINERALS LTD., C-89-90, JANPATH, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACR 7857 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C.PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARIENDAR MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02.5.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/05/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS IS A BUNCH OF 14 APPEALS FILED BY THE ASSESSEE AND REVENUE, ARE DIRECTED AGAINST THE ORDERS OF THE LD. COMMISSIONER OF INCOM E TAX(A)-2, JAIPUR PERTAINING TO THE DIFFERENT ASSESSMENT YEARS I.E.2006-07, 2007-08 , 2008-09, 2009-10, 2011-12, 2012-13, 2013-14. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEAL, THEREFORE, ALL THESE APPEALS WERE TAKEN UP TOGETHER FOR HEARIN G AND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER FOR THE SAKE OF CONVENIEN CE AND BREVITY. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE APPEAL IN ITA NO. 253/JP/2015 PERTAINING TO THE A.Y. 2007-08 MAY BE TAKEN UP FIRST, ACCORDINGLY APPEAL PERTAINING TO THE ASSE SSMENT YEAR 2007-08 IS TAKEN AS LEAD CASE. ASSESSEES APPEAL IN ITA NO. 253/JP/2015. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL. 5 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1. THE LD. CIT(A) HAS ERRED ON FACTS AN IN LAW IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY THE AO U/S 147 OF THE IT ACT. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF M INING LAND OF RS. 92,99,632/- AND LEASEHOLD LAND OF RS. 7,26,239/- AG GREGATING TO RS. 1,00,25,871/-. HE HAS FURTHER ERRED IN DISALLOWING THIS CLAIM ONLY ON THE BASIS ON THE FINDING OF HIS PREDECESSOR ON THIS ISSUE IN AY 2010-11 IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARLIER YEARS AND IN SUBSEQUENT YEARS UPTO AY 2009-10 IN REGULAR ASSESSM ENT PROCEEDINGS AND THAT THE CLAIM IS ALSO SUPPORTED BY THE DECISIO N OF ITAT, HYDERABAD BENCH IN CASE OF NMDC LTD. VS. JCIT IN IT A NO. 714/HYD/2012 DT. 28.02.2014. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO BY HOLDING THAT RECEIPTS FROM SALE OF CERS CA NNOT BE CONSIDERED AS INCOME DERIVED FROM THE BUSINESS OF POWER GENERA TION UNDERTAKING AND THEREFORE DEDUCTION U/S 80IA IS NOT ALLOWABLE O N SUCH RECEIPTS. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 15,98,59,668/- ON THE BASIS OF TURNOVER OF THE MINI NG ACTIVITY AND WIND POWER GENERATION ACTIVITY FOR ALLOWING DEDUCTION U/ S 80IA ON THE INCOME FROM GENERATION OF POWER IGNORING THE FACT A ND EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 4.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 1,20,47,954/- OUT OF RURAL DEVE LOPMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXC LUSIVELY FOR THE PURPOSE OF BUSINESS. 5.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN NATURE OF THE INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 6. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF THE APPEAL. 7. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND ASSESSMENT UNDER SECTION 143(3)OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 21.01.2015. 6 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED THE CLAIM AMOUNTING TO RS. 1,00,25,871/- OF AMORTIZATION OF MINING LAND AND AMORTIZATION OF LEASEHOLD LAND. THE ASSESSING OFFICER ALSO MADE DISALLOWANCE OF DEDUCTION U/S 80IA IN RESPECT OF SALE OF CERS AMOUNTING TO RS. 3,50,00,16 2/- DISALLOWANCE OF RURAL DEVELOPMENT EXPENSES AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES OF RS. 2,96,49,172/- AND RS. 60,60,486/- RESPECTIVELY AND DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IA ON ACCOUNT OF APPORTIONMENT OF T HE EXPENSES AND THUS MADE AN ADDITION OF RS. 1,98,91,437/- ON ACCOUNT OF EXCESS DEDUCTION CLAIMED U/S 80IA OF THE ACT. 3. AGGRIEVED BY THIS, ASSESSEE PREFERRED AN APPEAL BE FORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS UPHELD THE ACTION OF TH E ASSESSEE FOR REOPENING OF THE ASSESSMENT. FURTHER, IN RESPECT OF CLAIM OF AMORTI ZATION THE LD. CIT(A) BY FOLLOWING THE DECISION OF HIS PREDECESSOR SUSTAINED THE ADDIT ION. HOWEVER, IN RESPECT OF ALLOWABILITY OF DEDUCTION U/S 80IA IN RESPECT OF RE CEIPT FROM SALE OF CARBON EMISSION REDUCTION CERTIFICATES (CERS IN SHORT), THE LD. CIT (A) HELD THAT THE SALE OF CARBON EMISSION REDUCTION CERTIFICATE ARE CAPITAL IN NATUR E. THEREFORE, THE ALTERNATE GROUND TAKEN BY THE ASSESSEE WAS ALLOWED. HOWEVER, THE CL AIM OF THE ASSESSEE BEFORE LD. CIT(A) WAS WITH REGARD TO ALLOWABILITY OF DEDUCTION U/S 80IA IN RESPECT OF SALE OF CARBON EMISSION REDUCTION CERTIFICATE WAS HELD TO B E NOT ALLOWABLE. THE LD. CIT(A) IN RESPECT OF APPORTIONMENT OF THE EXPENSES FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S 80IA DIRECTED THE ASSESSING OFFICER TO APPORTIO N THE COMMON EXPENDITURE OF RS. 15,98,59,668/- RELATED TO INCOME FROM WIND POWER IN THE RATIO OF TURNOVER AND TO COMPUTE DEDUCTION U/S 80IA ACCORDINGLY. IN RESPECT OF THE DISALLOWANCE OF EXPENDITURE RELATED TO RURAL DEVELOPMENT EXPENSES A ND AFFORESTATION, PLANTATION 7 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. AND ENVIRONMENTAL EXPENSES, THE LD. CIT(A) UPHELD T HE DISALLOWANCE TO THE EXTENT OF RS. 1,20,47,954/- REST OF THE EXPENDITURE WAS DI RECTED TO BE DELETED, ON THE BASSIS THAT SAME WERE INCURRED FOR THE BUSINESS PUR POSE. AGGRIEVED BY THIS ORDER BOTH REVENUE AND THE ASSESS EE HAVE FILED THE SEPARATE APPEALS BEFORE THIS TRIBUNAL. 4. GROUND NO. 1 OF ASSESSEES APPEAL IS AGAINST REOPENING OF THE A SSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE LD. COUNSEL STATED THAT THE ASSES SEE HAD BEEN REGULARLY CLAIMING THE AMORTIZATION OF MINING LAND AND LEASEHOLD LAND IN THE COMPUTATION OF THE TOTAL INCOME BASED ON THE ACCOUNTING POLICY FOLLOWED BY I T. THEREFORE, HE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REOPENIN G THE ASSESSMENT, ON THIS GROUND. 4.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTATI VES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE ASSESSMENT WAS R EOPENED ON THE BASIS THAT THE ASSESSEE HAD CLAIMED DEDUCTION AMOUNTING OF RS. 1,0 0,25,871/- AS AMORTIZATION OF MINING LAND AND AMORTIZATION ON LEASEHOLD LAND IN T HE COMPUTATION OF THE TOTAL INCOME. IT WAS OBSERVED BY THE ASSESSING OFFICER T HAT LAND IS NOT DEPRECIABLE ASSET FALLING UNDER THE PROVISIONS OF SECTION 32 OF THE A CT, MOREOVER, THE AMORTIZATION OF LAND IS NOT SPECIFIED U/S 35D(2) OF THE ACT. THE LD . DR SUBMITTED THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS NO QUERY WAS RAISED IN THIS RESPECT. THEREFORE, THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND ON THE I SSUE OF ALLOWABILITY OF SUCH CLAIM HENCE NON-CONSIDERING OF THIS ISSUE RESULTED INTO T HE INCOME ESCAPED ASSESSMENT. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN R E-OPENING THE ASSESSMENT, IN REJOINDER LD. COUNSEL FOR THE ASSESSEE PLACED RELIA NCE UPON THE JUDGMENT OF THE HONBLE HIMACHAL PRADESH HIGH COURT RENDERED IN THE CASE OF CIT VS. SAHIL KNIT FAB 8 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 70 DTR 345 (HP) (HC) AND ALSO THE JUDGMENT OF THE H ONBLE ANDHRA PRADESH RENDERED IN THE CASE OF SIRPUR PAPER MILLS LTD. VS. ITO 114 ITR 404 (AP) (HC) TO BUTTRESS THE CONTENTION THAT THE RE-OPENING OF THE ASSESSMENT WAS NOT JUSTIFIED. 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THERE IS NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT THE ASSESSING OF FICER CAN REOPEN THE ASSESSMENT, IF HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. IN THE PRESENT CASE, IN THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER HAD NOT CONSIDERE D THE ISSUE OF ALLOWABILITY OF THE AMORTIZATION OF MINING LAND AND LEASEHOLD LAND. HE HAD SIMPLY WITHOUT MAKING ANY ENQUIRY ALLOWED THE CLAIM OF THE ASSESSEE, WHIC H IS NOT THE MANDATE OF THE LAW. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN TO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSE ES APPEAL IS DISMISSED. 5. GROUND NO. 2 , IS AGAINST CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM OF AMORTIZATION OF MINING LAN D OF RS. 92,99,632/- AND LEASEHOLD LAND OF RS. 7,26,239/- AGGREGATING TO RS. 1,00,25,871/-. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER WITH REGARD TO DISALLOWING THE CLAIM OF AMORTIZATION OF MINING LAND AND LEASEHOLD LAND. HE SUBMITTED THAT THE LD. CIT(A) DISALLOWED THE CLAIM ON THE BASIS OF THE FINDING OF HIS PREDECESSOR IGNORING THE FACT THAT CLAIM WAS EARLIER ALLOWED AND IN THE SUBSEQUEN T YEARS ALSO UPTO ASSESSMENT YEAR 2009-10 IN THE REGULAR ASSESSMENT PROCEEDINGS AND THAT THE CLAIM IS ALSO SUPPORTED BY THE DECISION OF THE HONBLE ITAT, HYDE RABAD BENCH IN THE CASE OF NMDS LTD. VS. JCIT IN ITA NO. 714/HYD/2012, DATED 2 8/2/2014. 9 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 5.1 THE LD. COUNSEL SUBMITTED THAT, ASSESSEE IS ENGAGE D IN THE BUSINESS OF MINING. THE MINING LANDS SO ACQUIRED BY THE ASSESSE E ARE WASTING ASSET. THESE MINING LANDS DO NOT HAVE ANY ECONOMIC USE AFTER THE EXTRACTION OF MINERAL SINCE AFTER EXCAVATION THERE WOULD BE DEEP PITS FILLED U P WITH THE OVERBURDEN WHICH CANNOT BE USED FOR AGRICULTURE OR OTHERWISE. THE W ATER IS HIGHLY SALINE WHICH CANNOT BE USED FOR THE DRINKING OR AGRICULTURAL PURPOSE. IN THESE CIRCUMSTANCES, THE LAND HAS A LIMITED USEFUL LIFE WHICH CAN NEVER BE PUT TO ANY OTHER USE. HE SUBMITTED THAT MINING LAND WHICH IS A WASTING ASSET, CANNOT BE EQU ATED WITH A NORMAL LAND AS THE VALUE OF NORMAL LAND USUALLY APPRECIATE WHEREAS VAL UE OF THE MINING LAND ERODE AFTER EXTRACTION OF MINERAL LIES BENEATH IT. IN CASE OF THE NORMAL LAND, IT HAS AN UNLIMITED LIFE, BUT IN THE CASE OF MINING LAND IT HAS A LIMIT ED LIFE AFTER THE MINERAL IS EXTRACTED OR LEASE PERIOD IS EXPIRED, SUCH LAND HAS NO VALUE FOR THE ASSESSEE. THE USAGE OF THE NORMAL LAND IS FOR SEVERAL PURPOSES LIKE HABITATION , AGRICULTURAL ETC. IN CASE OF WASTING MINING LAND BESIDES EXTRACTING MINERAL THER E IS NO OTHER ALTERNATE USE OF THIS LAND, AS IT IS NOT FIT FOR FARMING AND HABITAT ION. THE NORMAL LAND IS, BUT IN THE CASE OF THE MINERAL LAND IT CAN BE DONE ONLY BY PER SON WHO HOLDS VALID MINING LEASE FROM THE GOVERNMENT. THESE LANDS ARE NOT FREELY TR ANSFERABLE. THE NORMAL LAND CAN BE MORTGAGED AND OWNER CAN AVAIL LOAN ON IT, WH EREAS IN THE CASE OF WASTING MINING LAND, THE ASSESSEE CAN NEITHER MORTGAGE THES E LANDS NOR CAN AVAIL LOAN ON IT. THEREFORE, THE COST INCURRED FOR ACQUIRING THESE LA NDS IS ONLY FOR EXTRACTING THE MINERAL WHICH NEEDS TO BE AMORTIZED OVER ITS USEFUL LIFE AND IS HENCE ALLOWABLE U/S 37(1) OF THE ACT. THE LD. COUNSEL OF THE ASSESSEE FOR THIS PROPOSITION RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CA SE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT 225 ITR 802, AN D ALSO THE JUDGMENT OF THE 10 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. HONBLE GUJRAT HIGH COURT RENDERED IN THE CASE OF D CIT VS SUN PHARMACEUTICALS IND. LTD. 329 ITR 479. 5.2 PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES SUBMIT TED THAT THIS ISSUE WAS BEFORE THIS HONBLE TRIBUNAL IN APPEAL OF THE ASSES SEE PERTAINING TO THE YEAR 2010- 11 IN ITA NO. 124/JP/2014. THE HONBLE TRIBUNAL WA S PLEASED TO REJECT THE CLAIM OF THE ASSESSEE. HE SUBMITTED THAT THE ISSUE OF ALLO WABILITY OF EXPENDITURE IS U/S 37(1) OF THE ACT HAS ALREADY BEEN DECIDED AGAINST THE ASS ESSEE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAD DECIDED THE ISSUE AGAINST THE ASSESSEE AS UNDER:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] 11 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF 12 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GR OUND NO. 2, THE AO IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF IN TERMS IN DICATED HEREINBEFORE. 13 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 6. AT THE TIME OF HEARING GROUND NO. 3 WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, GROUND NO. 3 IS DISMISSED AS NOT PRESSED. 7. GROUND NO. 4, IS AGAINST DIRECTING THE ASSESSING OFFICER TO APPO RTION ESTABLISHMENT AND FINANCIAL EXPENDITURE OF RS. 15,9 8,59,668/- ON THE BASIS OF TURNOVER OF THE MINING ACTIVITY AND WIND POWER GENE RATION ACTIVITY. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE LD. COUNSEL SUBMITTED THAT LD. CIT(A) HAS RIGHTLY HELD THAT ESTABLISHMENT AND FINANCE EXPENSE INCURRED ON MINING ACTIVITY WHICH HAS NO NE XUS WITH THE GENERATION OF WIND POWER. HOWEVER, HE GAVE A FINDING THAT THE EXPENDI TURE INCURRED ON HEAD OFFICE AND CORPORATE OFFICE CAN BE ATTRIBUTED TO GENERATION OF INCOME FROM WIND POWER BY NOT ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE E NTIRE OPERATION AND MAINTENANCE OF WIND POWER PLANT HAS BEEN GIVEN TO SUZLON ENERGI ES LTD. THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO INCUR ANY EXPENDITURE. HE SUBM ITTED THAT LD. CIT(A) HAS RIGHTLY HELD THAT THE APPORTIONMENT IS TO BE MADE IN THE RA TIO OF TURNOVER OF THE WIND POWER VIS-A-VIS THE TOTAL TURNOVER OF THE ASSESSEE AS AGA INST THE RATIO OF THE TOTAL INCOME DONE BY THE ASSESSING OFFICER. 7.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. AU THORIZED REPRESENTATIVE MADE NO SUBMISSIONS BEFORE THE ASSESSING OFFICER, THAT THE ENTIRE OPERATION AND MAINTENANCE OF THE WIND POWER PLANT HAD BEEN GIVEN TO SUZLON EN ERGIES LTD. THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO INCUR ANY OTHER EXPEND ITURE. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS DECIDED THE ISSUE AS UN DER:- 14 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSME NT ORDER AND THE SUBMISSIONS OFF THE APPELLANT. THE ASSESSEE HA S TWO STREAMS OF INCOME (I) INCOME FROM GENERATION OF POWER FROM WIN D POWER PLANT WHICH IS ELIGIBLE FOR DEDUCTION U/S 80IA, (II) INCO ME FROM MINING ACTIVITY. THE ASSESSING OFFICER HAS HELD THAT ESTAB LISHMENT AND FINANCIAL EXPENSES AMOUNTING TO RS. 35,03,29,513/- WERE COMMO N TO BOTH THE REVENUE STREAMS AND YET HAD NOT BEEN APPORTIONED TO THE BUSINESS OF WIND POWER, ELIGIBLE FOR DEDUCTION U/S 80IA. THE A PPELLANT HAS GIVEN A DETAILED BREAKUP OF THE EXPENDITURE DEBITED UNDER T HE HEAD ESTABLISHMENT & FINANCIAL EXPENSES. THESE EXPENS ES INCLUDE ESTABLISHMENT AND FINANCE EXPENSES INCURRED BY THE DIVISIONS OF MINING OF PHOSPHATE, LIGNITE, GYPSUM, LIMESTONE WHICH HAS NO NEXUS WITH THE GENERATION OF WIND POWER AS WELL AS EXPENSES INCURR ED AT THE HEAD OFFICE AND CORPORATE OFFICE. IT IS THE ESTABLISHME NT AND FINANCE EXPENDITURE INCURRED AT THE HEAD OFFICE AND CORPORA TE OFFICE WHICH CAN BE ATTRIBUTABLE TO GENERATION OF INCOME FROM WIND P OWER. SUCH EXPENDITURE AMOUNT TO RS. 21,20,64,848/- FOR THE CO RPORATE OFFICE AND A SUM OF RS. 47,56,632/- FOR THE HEAD OFFICE, TOTAL ING RS. 21,68,21,480/-. THIS INCLUDES DONATION OF RS. 5,00 ,00,000/- WHICH HAS BEEN DISALLOWED BY THE ASSESSING OFFICER IN THE STA TEMENT OF TOTAL INCOME AND IS NOT AN ALLOWABLE EXPENDITURE. OUT OF THE BALANCE EXPENDITURE; A SUM OF RS. 69,61,812/- HAS BEEN INCU RRED RURAL DEVELOPMENT EXPENSES WHICH HAS BEEN DISALLOWED IN P ARA 6 OF THIS ORDER. THEREFORE, THE ADMISSIBLE EXPENDITURE, CLAI MED AS A DEDUCTION WHICH NEEDS TO THE APPORTIONED BETWEEN GENERATION F ROM WIND POWER AND MINING ACTIVITY AMOUNTS TO RS. 15,98,59,668/-. THE ASSESSING OFFICER HAS APPORTIONED THIS EXPENDITURE ON THE BAS IS OF THE RESPECTIVE INCOME. THE APPELLANT HAS STATED THAT NO EXPENDITU RE OUT OF THE ABOVE IS ATTRIBUTABLE TO GENERATION OF INCOME FROM WIND P OWER. THIS CONTENTION OF THE APPELLANT CANNOT BE ACCEPTED BECA USE CERTAIN AMOUNT OF ESTABLISHMENT EXPENSES WOULD DEFINITELY H AVE BEEN INCURRED 15 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. IN THE BUSINESS OF GENERATION OF WIND POWER AND OBT AINING CARBON CREDIT CERTIFICATES. HOWEVER, IN MY VIEW THE CORRE CT BASIS FOR APPORTIONING THIS EXPENDITURE IS IN THE RATIO OF TU RNOVER AND NOT INCOME. THE ASSESSING OFFICER IS THEREFORE, DIRECT ED TO APPORTION COMMON EXPENDITURE OF RS. 15,98,59,668/- RELATING T O INCOME FROM WIND POWER IN THE RATIO OF THE TURNOVER AND COMPUTE DEDUCTION U/S 80IA ACCORDINGLY. THE BALANCE ADDITION, ON THE ISS UE IS DIRECTED TO BE DELETED. THIS GROUND IS PARTLY ALLOWED. 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFORE L D. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENANCE OF THE POWER PLANT HAD BEEN GIV EN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPEND ITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES D EBITED UNDER THE VARIOUS HEADS OF EXPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRA TEGIC PLANNING, DAY TO DAY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, M ARKETING MANAGEMENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONT ROL ETC. WAS REQUIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFF ICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE , THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORD ING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATU RE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDE RING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT THE ENTIRE EXPENDITU RE RELATED TO OPERATION AND 16 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. MAINTENANCE WAS BORNE BY SUZLON ENERGIES LTD. SO F AR THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT THIS ITEM WAS NOT SUB JECT MATTER OF THE REASONS RECORDED FOR REOPENING. WE DO NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTH ER ISSUES AS CROPPED UP THE ASSESSMENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE A SSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS D ISMISSED. 8. GROUND NOS. 5 TO 5.1 ARE AGAINST CONFIRMATION OF DISALLOWANCE OF RS. 1,20,47,954/- OUT OF RURAL DEVELOPMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. 8.1 APROPOS TO GROUND NO. 5.1, THE LD. COUNSEL SUBMITTED THAT THIS DISALLOWANCE HAS BEEN CONFIRMED EVEN WHEN IT WAS NO T A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 WHEN SUCH DISALLOWANCE I S NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 8.2 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT ONCE THE R EOPENING IS VALIDLY DONE THE ASSESSING OFFICER IS WITHIN ITS POWER TO MAKE ASSES SMENT IN RESPECT OF THE ISSUES WHICH WERE NOT EVEN TAKEN INTO CONSIDERATION WHILE ISSUANCE OF NOTICE U/S 148 AS AFTER REOPENING THE ASSESSING OFFICER WOULD HAVE TH E SAME POWER AS IN THE ORIGINAL ASSESSMENT. 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAKE ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REOPENED ASSESSMENT PROCEEDINGS. NOW, C OMING TO THE MERIT OF 17 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. DISALLOWANCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PUR POSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE AB SENCE OF MATERIAL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANNOT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 9. GROUND NO. 6, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 10. GROUND NO. 7 IS PRAYER FOR COST; THE ASSESSEE HAS NOT ADDRESSED ANY ARGUMENT TO DEMONSTRATED AS TO WHY COST SHOULD BE A WARDED. HENCE, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 253/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. REVENUES APPEAL IN ITA NO. 295/JP/2015 NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO. 295/JP/2015 PERTAINING TO A.Y. 2007-08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE OF RS. 3,50,00,162/- BY HOLDING THAT RECEIPTS FROM SALE OF CARBON EMISSION CERTIFICATES ARE OF CAPITAL IN NATURE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE U/S 80IA AMOUNTING TO RS. 1,67,18,177/- BY NOT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER WITH REGARD TO E STABLISHMENT AND FINANCIAL EXPENSES. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS. 1,76 ,01,218/- EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD RURAL DEVE LOPMENT AND RS. 60,60,486/- UNDER THE HEAD AFFORESTATION, PLANTATI ON AND ENVIRONMENT EXPENSES WITHOUT APPRECIATING THE FACT THAT THESE EXPENSES HAVE NOT BEEN INCURRED IN CONNECTION WITH THE BUSINESS OF TH E ASSESSEE. 18 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 4. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND O R ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 12. GROUND NO. 1 IS AGAINST HOLDING THE RECEIPTS FROM SALE OF CARBO N EMISSION CERTIFICATES (CERS) AS CAPITAL IN NATURE. LD. DEPA RTMENTAL REPRESENTATIVES VEHEMENTLY ARGUED THAT THE LD. CIT(A) WAS NOT JUSTI FIED IN HOLDING THE RECEIPTS FROM SALE OF CERS AS CAPITAL IN NATURE. 12.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND SUBMITTED TH AT LD. CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT R ENDERED IN THE CASE OF CIT VS. MY HOME POWER LTD. 365 ITR 82. 12.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE LD. CIT (A) HAS CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND DECI DED THE ISSUE IN PARA 4.3 AS UNDER:- 4.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSEE HAD CLA IMED DEDUCTING U/S 80IA AMOUNTING TO RS. 3,50,00,162/- ON ACCOUNT OF SALE O F CARBON EMISSION CERTIFICATES. THIS ISSUE ALSO AROSE DURING THE PRO CEEDING FOR A.Y. 2010-11 WHERE THE CIT (A)-II, JAIPUR, IN APPEAL NO. 325/12- 13, DATED 05.12.2013 HAS HELD AS UNDER:- 'ASSESSING OFFICER DID NOT ALLOW DEDUCTION UNDER SE CTION 80 1A ON...... INCOME ON SALE OF CERS BY HOLDING THAT THESE ARE NOT HAVIN G FIRST-DEGREE NEXUS WITH INDUSTRIAL UNDERTAKING ENGAGED IN THE BUSINESS OF G ENERATION OF ELECTRICITY.' AS REGARDS APPELLANT'S CLAIM OF DEDUCTION UNDER SECTION 80 1A ON CERS AND FURTHER CLAIM IN GROUND-8 THAT CER IS CAPI TAL IN NATURE AND TO BE EXCLUDED FROM COMPUTATION OF TAXABLE INCOME , IT IS NECESSARY TO UNDERSTAND THE BACKGROUND AND SOURCE OF CERS ENTITLEMENT (OR C ARBON CREDIT, AS POPULARLY KNOWN). 'A CARBON CREDIT IS A GENERIC TE RM FOR ANY TRADABLE 19 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. CERTIFICATE OR PERMIT REPRESENTING THE RIGHT TO EMI T ONE TONNE OF CARBON DIOXIDE OR THE MASS OF ANOTHER GREENHOUSE GASES (GH G IN SHORT) (WITH A CARBON DIOXIDE EQUIVALENT (CO2E)), EQUIVALENT TO ON E TONNE OF CARBON DIOXIDE.' THE COLLINS ENGLISH DICTIONARY ALSO DEFI NES A CARBON CREDIT AS 'A CERTIFICATE SHOWING THAT A GOVERNMENT OF COMPANY HA S PAID TO HAVE A CERTAIN AMOUNT OF CARBON DIOXIDE REMOVED FROM THE ENVIRONME NT.' THE 'INVESTOPEDIA INC. INVESTMENT DICTIONARY' DEFINES A CARBON CREDIT AS A 'PERMIT THAT ALLOWS THE HOLDER TO EMIT ONE TONNE OF CARBON DIOXIDE'. SUCH PERMITS (OR CERS) 'CAN BE TRADED IN THE INTERNATIONAL MARKE T AT THEIR CURRENT MARKET PRICE.' CERTAIN INDUSTRIES ESPECIALLY IN POWER, C EMENT, STEEL, TEXTILE, FERTILIZER SECTORS RELY ON FOSSIL FUELS (COAL, ELECTRICITY DER IVED FROM COAL, NATURAL GAS AND OIL). THE BURNING OF FOSSIL FUELS IS A MAJOR SOURC E OF GHG EMISSIONS. THE MAJOR GREENHOUSE GASES EMITTED BY THESE INDUSTRIES ARE CARBON DIOXIDE, METHANE, NITROUS OXIDE, HYDRO-FLUOROCARBON (HFCS), ETC., ALL OF WHICH INCREASE THE ATMOSPHERES ABILITY TO TRAP INFRA-RED ENERGY A ND, THUS, AFFECT THE CLIMATE. UNDER THE UN UMBRELLA ABOUT 170 COUNTRIES SIGNED 'K YOTO PROTOCOL' UNDER WHICH A CAP WAS PUT ON SUCH CARBON AND GHGS E MISSIONS. TOTAL AMOUNT OF GHGS EMISSION IN THE ATMOSPHERE BY ALL TH E COUNTRIES IN A YEAR WAS FIXED AND EQUIVALENT NUMBER OF CERS WAS WORKED OUT AND DISTRIBUTED AMONG THE MEMBER COUNTRIES. THE MEMBER COUNTRIES, IN TURN, DISTRIBUTED OR ASSIGNED THESE CERTIFICATES AMONG THE DESIGNATED IN DUSTRIES IN THEIR COUNTRY. AN INDUSTRY IN POWER SECTOR WOULD BECOME ENTITLED T O THESE CERTIFICATES. IF THEY USED FOSSIL FUEL THEY WOULD HAVE TO RESTRICT T HE GHG EMISSION TO THE LEVEL AS PER CER ASSIGNED TO THEM. THE CERS ARE ALSO TRA DABLE AT STOCK EXCHANGE. IN BRIEF, THE CARBON CREDITS ARE CERS, WHICH GIVE P ERMISSION TO EMIT ASSIGNED AMOUNT GHGS. WHETHER CERS ARE AKIN TO 'IMPORT ENTITLEMENTS'? - THE CERS ARE, THEREFORE, INCENTIVES GIVEN BY THE GOVERNMENT TO AV OID USE OF FOSSIL FUEL IN THE INDUSTRY. IF SAVING IN CERS IS MADE, THE INDUS TRY CAN MAKE MONEY BY SELLING THEM. THEY HAVE ALMOST SIMILAR FEATURES AS IN AN 'IMPORT ENTITLEMENT'. BASES ON THE QUANTUM OF EXPORTS, THE EXPORTERS ARE GIVEN IMPORT ENTITLEMENTS. THE EXPORTERS CAN EITHER IMPO RT THE RAW MATERIAL/GOODS COVERED BY THE IES OR WITHOUT IMPORT ING THE GOODS THEY CAN SELL THE IES. IF THEY IMPORT THEY CONSUME OR EXHAU ST THE IES TO THAT EXTENT. IF THEY DO NOT, THEN TO THE EXTENT THEY SAVE THEY CAN SELL AND EARN MONEY. CERS ARE ALSO ENTITLEMENTS FOR CONSUMING FOSSIL FUEL. S AVINGS IN THESE ARE AVAILABLE FOR SALE. BOTH ARE RIGHTS OR PERMITS GIVEN BY GOVE RNMENT. 'IF AN ASSESSEE EXPLOITS THE IES BY ACTUALLY IMPORTING THE GOODS RE FERRED TO THEREIN AND SELLS THE SAME, THE SALE PROCEEDS CANNOT, IN ANY SENSE, BE SAID TO BE A CAPITAL 20 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. RECEIPT. THE FACT THAT THE ASSESSEE CHOOSES TO EXPLOIT THE IES IN A DIFFERENT MANNER, OTHER THAN ACTUAL IMPORT, WILL NOT MAKE ANY CHANGE IN THE CHARACTER OF THE RECEIPT. THE SALE OF IMPORT ENTITLEMENT IS ONE OF THE MODES OF EXPLOITING THE IMPORT ENTITLEMENT AND THEREFORE, WI LL CLEARLY BE A REVENUE RECEIPT [GEORGE MAIJO & CO. (VIAG) V. CIT [1986] 15 7 ITR 475 (MAD.)]. SIMILAR VIEW HAS BEEN TAKEN IN 1. SWADESHI COTTON MILLS CO. LTD. V. CIT [1989] 47 TAXMAN 215 (ALL.), 2. JEEWANLAL (1929) LTD V. CIT [ 1991] 57 TAXMAN 123 (CAL.), 3. GEDORE TOOLS PVT. LTD. V. CIT [1999] 105 TAXMAN 3 (DELHI). WHETHER CERS SHOULD BE TAXABLE AS REVENUE RECEIPT U NDER SECTION 28 (IV)?- FURTHER, SECTION 28 (IV) CLEARLY BRINGS THE RECEIPT FROM SALE OF CERS WITHIN THE AMBIT OF TAXABILITY. IT READS AS FOLLOW S: 28. PROFITS AND GAINS OF BUSINESS OR PROFESSION.--THE FOLLOWING INCOME SHALL BE CHARGEABLE TO INCOME- TAX UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS O R PROFESSION'.....(IV) THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHER CONVERT IBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXERCISE OF A PROFESSI ON. THERE ARE FOLLOWING TWO CONDITIONS: (I) ASSESSEE RECEIVES ANY BENEFIT OR PE RQUISITE, (II) THEY SHOULD ARISE IN THE COURSE OF BUSINESS. 'BENEFIT' MEANS ' ADVANTAGE; PROFIT; GAINS; INTEREST; USE; PROMOTION OF WELFARE OR PROSPERITY; HELPFUL RESULT; A BENEFACTION OR DEED OF KINDNESS; FAVOUR BESTOWED; P RIVILEGE. 'BENEFIT' IS A WORD OF WIDE IMPORT. IT COULD BE EXPRESS OR OTHERW ISE. THE TERM 'PERQUISITE' MEANS THAT IT IS AN ADDITIONAL BENEFIT AND NOT A COMPLETE SUBSTITUTION OF ONE'S INCOME. THIS IS THE BENEFIT GIVEN TO THE INDUSTRY DURING THE COURSE OF PRODUCTION IT HAS EITHER NOT CONSUMED FOSSIL FUEL OR HAS CONSUMED LESS THAN WHAT WAS ASSIGNED TO IT. THEREF ORE, SALE PROCEEDS OF SUCH SAVINGS OF CERS ARISE, DURING THE COURSE OF BU SINESS, AND AS A RESULT OF CARRYING ON BUSINESS. THUS (I) RIGHT TO RECEIVE CE RS ARISES ONLY IF BUSINESS IS CARRIED ON BY THE ASSESSEE, (II) SUCH BUSINESS IS C ARRIED ON BY SAVING FOSSIL FUEL, (III) CERS HAVE A MARKET VALUE, (IV) QUANTITIES OF CERS ASSIGNED BY GOVT. VARY WITH THE SIZE OF THE INDUSTRY OR PRODUCTION TARGET, (V) QUANTITIES OF SAVED CERS ARE VARIABLE, DEPENDING UPON SAVING MADE IN CO NSUMPTION OF FOSSIL FUEL, (VI) SALE PROCEEDS OF SAVED CERS COMPENSATE FOR INC URRING EXTRA EXPENDITURE ON USING ALTERNATE FUEL (OTHER THAN FOSSIL FUEL). THEREFORE, SALE PROCEEDS OF CERS ARE REVENUE RECEIPTS NOT ONLY FROM THE INTRINSIC NATURE OF THE ENTITLEMENT BUT ALSO BECAUS E THESE ARE CLOSELY CONNECTED WITH CARRYING OUT BUSINESS. THEY ARE TAX ABLE UNDER SECTION 28 (IV) AS BENEFIT ARISES DURING THE COURSE OF CARRYING ON BUSINESS. HOWEVER, ON SUCH REVENUE RECEIPTS WHICH ARE AKIN TO IMPORT ENTITLEME NTS LIKE DUTY DRAWBACK, DEDUCTION UNDER SECTION 80 IA CANNOT BE GIVEN IN VI EW OF THE APEX COURT DECISION IN THE CASE OF LIBERTY INDIA LTD SINCE THE RE IS NO FIRST DEGREE NEXUS. 21 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ACCORDINGLY, THE DECISION OF AO IN NOT ALLOWING DED UCTION UNDER SECTION 80 IA AND TREATING CER INCOME AS REVENUE AS AGAINST AP PELLANTS CLAIM OF CAPITAL, ARE CONFIRMED.' 4.4 FOLLOWING THE ABOVE ORDER, IT IS HELD THAT DEDUCTIO N U/S 80IA IS NOT ALLOWABLE ON THE PROCEEDS OF CARBON CREDITS SINCE T HIS INCOME DOES NOT FIRST DEGREE NEXUS WITH THE INDUSTRIAL UNDERTAKING IN VIE W OF THE DECISION OF THE APEX COURT IN THE CASE OF LIBERTY INDIA. 4.5.1 WITH RESPECT TO THE CONTENTION OF THE APPELLA NT THAT RECEIPT FROM SALE OF CERS IS CAPITAL IN NATURE, IT IS ALSO TO BE STAT ED THAT SUBSEQUENT TO PASSING OF THE ABOVE ORDER BY THE CIT (A)-II, JAIPUR ON 06. 12.2013, THE ANDHRA PRADESH HIGH COURT IN THE CASE OF MY HOME POWER LTD . 365 ITR 82 HAS (ON 19.02.2014) UPHELD THE ORDER OF THE ITAT, HYDERABAD IN THIS CASE THAT SALE OF EXCESS CARBON CREDITS IS A CAPITAL RECEIPT AND CANN OT BE BUSINESS RECEIPT OR INCOME. THE RELEVANT EXTRACT OF THIS ORDER IS GIVE N BELOW- WE HAVE CONSIDERED THE AFORESAID SUBMISSION AND WE ARE UNABLE TO ACCEPT THE SAME, AS THE LEARNED TRIBUNAL HAS FACTUALLY FOU ND THAT 'CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVI RONMENTAL CONCERNS. NO ASSET IS GENERATED IN THE COURSE OF BUSINESS BUT IT IS GENERATED DUE TO ENVIRONMENTAL CONCERNS'. WE AGREE WITH THIS FACTUAL ANALYSIS AS THE ASSESSEE IS CARRYING ON THE BUSINESS OF POWER GENERATION. TH E CARBON CREDIT IS NOT EVEN DIRECTLY LINKED WITH POWER GENERATION. ON THE SALE OF EXCESS CARBON CREDITS THE INCOME WAS RECEIVED AND HENCE AS CORRECTLY HELD BY THE TRIBUNAL IT IS CAPITAL RECEIPT AND IT CANNOT BE BUSINESS RECEIPT O R INCOME.' 4.5.2 ALSO, THE ITAT, JAIPUR IN THE CASE OF SHREE C ERNENT LTD. IN ITA NO. 503, 504, 564, 569, 570, 505/JP/2012, DATED 27.01.2014 H AS FOLLOWED THE DECISION OF THE ITAT, HYDERABAD IN THE CASE OF MY HOME POWER LTD AND THE DECISIONS OF THE CHENNAI TRIBUNAL IN THE CASES OF SRI VELAYUD HASWAMY SPINNING MILLS PVT. LTD. AND AMBIKA COTTON MILLS LTD. AND HAS HELD THAT RECEIPT ON ACCOUNT OF CARBON CREDIT IS CAPITAL IN NATURE AND NOT CHARGEAB LE TO TAX. THE RELEVANT EXTRACT OF THIS ORDER IS GIVEN BELOW- 22 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ' WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE EVIDENCE ON RECORD. WE FIND THAT APPELLATE TRIBUNAL IN Y HOME POWER LTD VS. DCI T [SUPRA], HAVE, AFTER DETAILED EXAMINATION, CONCLUDED THAT THE RECEIPTS FROM CARBO N CREDIT ARE CAPITAL IN NATURE. WE ARE INCLINED TO FOLLOW THE SAID DECISION AND THE OTHER TWO DECISIONS OF CHENNAI TRIBUNAL IN SRI VELAYUDHASWAMY SPINNING MILLS (P.) LTD VS DCIT [SUPRA] AND AMBIKA COTTON CREDIT IS CAPITAL IN NATURE & NEITHER CHARGE ABLE TO TAX UNDER THE HEAD BUSINESS INCOME NOR LIABLE TO TAX UNDER THE HEAD CAPITAL GAI NS. OUR ABOVE VIEW IS ALSO SUPPORTED BY THE DECISION OF SUPREME COURT IN THE C ASE OF VODAFONE INTERNATIONAL HOLDINGS VS. UOI [SUPRA] WHEREIN SUPREME COURT HAS HELD THAT TREATMENT OF ANY PARTICULAR ITEM IN DIFFERENT MANNER IN THE 1961 ACT AND DTC SERVES AS AN IMPORTANT GUIDE IN DETERMINING THE TAXABILITY OF SAID ITEM. SINCE DTC BY VIRTUE OF THE DEEMING PROVISIONS SPECIFICALLY PROVIDES FOR TAXABILITY OF CARBON CREDIT AS BUSINESS RECEIPT AND INCOME TAX ACT DOES NOT DO SO, OUR VIEW GETS DULY F ORTIFIED BY THE PRINCIPLES STATED IN THE ABOVE DECISION OF SUPREME COURT. ACCORDINGLY T HIS GROUND OFF THE ASSESSEE IS ALLOWED AND THE ADDITION MADE BY THE AI IS DELETED. ' 4.5.3 FOLLOWING THE ABOVE ORDERS OF THE ANDHRA PRAD ESH HIGH COURT AND THE JURISDICTIONAL ITAT, IT IS HELD THAT RECEIPTS FROM SALE OF CARBON EMISSION REDUCTION CERTIFICATE ARE CAPITAL IN NATURE AND THE REFORE, CANNOT BE TAXED. GROUND NO. 3 IS DISMISSED WHILE GROUND NO. 3.1 IS A LLOWED. 12.3 SINCE, THE LD. CIT(A) HAS FOLLOWED THE JUDGMENT OF THE HONBLE ANDHRA PRADESH HIGH COURT RENDERED IN THE CASE OF MY HOME POWER LTD. 365 ITR 82(SUPRA) WHERE THE HONBLE COURT, UNDER THE IDENTICAL FACTS CONFIRMED THE VIEW OF THE TRIBUNAL IN HOLDING THAT CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVIRONMENTAL CONCERNS. NO ASSET IS GENERATED IN C OST OF BUSINESS BUT IT IS GENERATED DUE TO ENVIRONMENTAL CONCERNS. THEREFORE , ON SALE OF EXCESS CARBON CREDITS CORRECTLY HELD BY THE TRIBUNAL AS A CAPITAL RECEIPT. IN VIEW OF THE JUDGMENT OF HONVBLE ANDHRA PRADESH HIGH COURT, WE DO NOT SEE A NY REASON TO DISTURB THE FINDING OF LD. CIT(A), SAME IS HEREBY AFFIRMED. THE REVENUE HAS NOT BROUGHT TO OUR 23 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NOTICE ANY CONTRARY BINDING PRECEDENT. HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 13. GROUND NO. 2 IS AGAINST ALLOWING CLAIM OF THE ASSESSEE U/S 80IA AMOUNTING TO RS. 1,67,18,177/-. THE LD. DEPARTMENTAL REPRESE NTATIVES VEHEMENTLY ARGUED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING T HE DISALLOWANCE AND ALLOWING THE RELIEF TO THE ASSESSEE. HE SUBMITTED THAT THE ASSE SSING OFFICER HAS GIVEN A FINDING THAT MANY EXPENSES ARE OF COMMON NATURE I.E. HEAD O FFICE AND OTHER DAY TO DAY MANAGEMENT AND SUPERVISION EXPENSES HAVE NOT BEEN A PPORTIONED. 13.1 . ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THAT THE ALLOCATION OF EXPENSES IN THE RATIO OF THE TOTAL INCOME OF THE ELIGIBLE UNITS TO THE TOTAL INCOME OF THE ASSESSEE IS INCORRECT. EVEN IF ALLOCATION IS TO BE MADE IT SHOULD BE MADE IN THE R ATIO TO TOTAL TURNOVER OF THE ELIGIBLE UNITS U/S 80IA TO THE TOTAL TURNOVER OF TH E ASSESSEE. THE TOTAL TURNOVER OF THE ELIGIBLE UNITS FROM SALE OF POWER IS RS. 8,49,4 8,646/- WHEREAS THE TOTAL TURNOVER OF THE ASSESSEE IS RS. 530,88,19,416/-. THUS, THE T OTAL TURNOVER OF THE ELIGIBLE UNITS IS ONLY 1.60% OF THE TOTAL TURNOVER OF THE ASSESSEE . 13.2 WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND THAT THE ASSESSEE HAD ALSO CHALLENGED THE FINDING OF THE LD. CIT(A) ON THIS IS SUE IN ITA NO. 253/JP/2015 AND WE HAVE RESTORED THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND 24 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENSES RELATED TO OPERATION AND MAINTENANCE WERE BORNE BY SUZLON ENERGIES LTD. SO FAR THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT THIS ITEM WAS NOT SUBJECT MATTER OF THE REASONS RECORDED FOR REOPENING. WE DO NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTHER ISSUES AS CROPPED UP TH E ASSESSMENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE ASSESSEES APPEAL IS ALLO WED FOR STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS DISMISSED. 13.3 THEREFORE, IN THE LIGHT OF ABOVE THIS GROUND OF TH E REVENUES APPEAL IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR D ECISION AFRESH. 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NOT RELATABLE T O THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESEE R EITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. 25 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 26 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE RE VENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRME D. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 15. GROUND NO. 4 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 16. IN THE RESULT, REVENUES APPEAL IN ITA NO. 295/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 17. NOW, WE TAKE UP THE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE I.E. 769/JP/2016 AND 804/JP/2016 PERTAINING TO THE A.Y. 2006-07. ASSESSEES APPEAL IN ITA NO. 769/JP/2016 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL I.E. IN ITA NO. 769/JP/2016. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE VALIDITY OF THE ORDER PASSED BY AO U/S 147 OF THE IT ACT. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF MINI NG LAND OF RS. 92,99,632/- AND LEASEHOLD LAND OF RS. 6,50,091/- AG GREGATING TO RS. 99,49,723/- BY TREATING IT AS CAPITAL EXPENDITURE. 2.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFKRIMING THE ABOVE DISALLOWANCE ON THE BASIS OF FINDINGS OF HONBLE IT AT IN ASSESSEES OWN CASE FOR AY 2010-11 BUT AT THE SAME TIME NOT ALLOWI NG THE BENEFIT OF TREATING SUCH EXPENDITURE AS CAPITAL EXPENDITURE AS DIRECTED BY HONBLE ITAT. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 18,70,932/- OUT OF RURAL DEVELO PMENT EXPENSES BY HOLDING THAT SAME IS IN THE NATURE OF EXPENDITURE O N CORPORATE SOCIAL RESPONSIBILITY AND THUS NOT ALLOWABLE U/S 37(1). 3.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 27 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 4. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF THE APPEAL. 5. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 18. THE GROUNDS RAISED IN THIS APPEAL ARE IDENTICAL AS WERE IN THE ITA NO. 253/JP/2015 PERTAINING TO THE A.Y. 2007-08. THE PARTIES HAVE ADOPTED THE SAME ARGUMENT IN ITA NO. 253/JP/2015. THE LD. COUN SEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. C IT(A). 19. GROUND NO. 1 IS AGAINST THE VALIDITY OF ORDER PASSED BY AO U/S 1 47 OF THE IT ACT. WE HAVE DECIDED THIS ISSUE IN ITA NO. 253/JP/ 2015 BY OBSERVING AS UNDER:- 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THERE IS NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT THE ASSESSING OFFICER CAN REOPEN THE ASSESSMENT IF HE HAS REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR. IN THE PRESENT CASE, IN THE ORIGINAL ASSESSMENT, THE ASSES SING OFFICER HAD NOT CONSIDERED THE ISSUE OF ALLOWABILITY OF THE AMORTIZ ATION OF MINING LAND AND LEASEHOLD LAND. HE HAD SIMPLY WITHOUT MAKING ANY E NQUIRY ALLOWED THE CLAIM OF THE ASSESSEE, WHICH IS NOT THE MANDATE OF THE LAW. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF T HE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSEES APPE AL IS DISMISSED. 19.2 FOR THE SAME REASONING THIS GROUND OF THE ASSESSEE S APPEAL IS DISMISSED. 20. GROUND NOS. 2 TO 2.1 , ARE AGAINST DISALLOWANCE OF CLAIM OF AMORTIZATIO N OF MINING LAND AND LEASEHOLD LAND BY TREATING THE SAME AS CAPITAL EXPENDITURE. THE IDENTICAL GROUND WAS RAISED BY THE ASSESSEE IN ITA NO. 253/JP/2015 PERTAINING TO THE A.Y. 2007-08. THE REPRESENTATIVES OF THE PARTI ES HAVE ADOPTED THE SAME ARGUMENTS. IN THE ITA NO. 253/JP/2015, WE HAVE D ECIDED THE ISSUE BY OBSERVING AS UNDER:- 28 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAS DECIDED THE IS SUE AGAINST THE ASSESSEE. HOWEVER, THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDE R:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL 29 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N FORMS INDICATED HEREINBEFORE. 30 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 20.1 FOR THE SAME REASONING, THESE GROUNDS OF THE ASSES SEES APPEAL IS DECIDED IN TERMS OF OUR DECISION IN ITA NO. 253/JP/2015 (SUPRA ). 21. GROUND NOS. 3 TO 3.1 ARE AGAINST CONFIRMING THE DISALLOWANCE OF RS. 18,70,932/- OUT OF RURAL DEVELOPMENT EXPENSES BY HO LDING SAME IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILITY AND THUS NOT ALLOWABLE U/S 37(1) OF THE ACT. GROUND NOS. 3 TO 3.1 ARE IDENTICAL AS WERE IN ITA NO. 253/JP/2015. THE REPRESENTATIVE PARTIES HAVE ADOPTED THE SAME ARGUME NT. WE HAVE DECIDED THE ISSUE BY OBSERVING AS UNDER:- 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAK E ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REO PENED ASSESSMENT PROCEEDINGS. NOW, COMING TO THE MERIT OF DISALLOWA NCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE ABSENCE OF MATERI AL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANN OT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 21.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 22. GROUND NO. 4 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 23. GROUND NO. 5 IS PRAYER OF AWARDED COST, NO SUPPORTING EVIDENCE IS PLACED BY THE ASSESSEE IN SUPPORT OF THIS CLAIM AND IDENTICAL CLAIM WAS MADE IN ITA NO. 253/JP/2015. 31 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 10. GROUND NO. 7 IS PRAYER FOR COST; THE ASSESSEE H AS NOT ADDRESSED ANY ARGUMENT TO DEMONSTRATED AS TO WHY COST SHOULD BE A WARDED. HENCE, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 23.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS DISMISSED. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 769/JP/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. REVENUES APPEAL IN ITA NO. 804/JP/2016. 25 . NOW, WE TAKE UP THE REVENUES APPEAL I.E. 804/JP/2016 PERTAINING TO THE ASSESSMENT YEAR 2006-07. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLO WANCE MADE BY AO ON ACCOUNT OF RURAL DEVELOPMENT EXPENSES TO RS. 18,70, 932/-. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWAN CE OF RS. 1,51,24,052/- MADE BY AO ON ACCOUNT OF AFFORESTATIO N, PLANTATION, & ENVIRONMENT EXPENSES. 3. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND O R ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 26. GROUND NO. 1 IS AGAINST RESTRICTING THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER ON RURAL DEVELOPMENT EXPENSES TO RS. 18,70, 932. THE IDENTICAL GROUND WAS RAISED IN THE REVENUES APPEAL IN ITA NO. 295/JP/2015 AS GROUND NO. 3, PERTAINING TO THE ASSESSMENT YEAR 2007-08 BY OBSERV ING AS UNDER:- 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 32 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE 33 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 26.1 FOR THE SAME REASONING, AS THE PARTIES HAVE ADOPTE D THE SAME ARGUMENTS. THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 27. GROUND NO. 2 IS AGAINST DELETING THE DISALLOWANCE MADE ON ACCOU NT OF AFFORESTATION, PLANTATION & ENVIRONMENT EXPENSES. THE IDENTICAL GROUND WAS RAISED BY THE REVENUE IN ITA NO 295/JP/2015. THE PARTIES HAVE ADOPTED THE SAME ARGUMENT. THIS TRIBUNAL IN ITA NO. 295/JP/2015 DECI DED THE ISSUE AS UNDER:- 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE 34 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 27.1 FOR THE SAME REASONING, THIS GROUND OF THE REVENUE S APPEAL IS DISMISSED. 28 . GROUND NO. 3 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 29. IN THE RESULT, THE CROSS APPEALS OF THE ASSESSEE IN ITA NO.769/JP/2016 IS PARTLY ALLOWED OR STATISTICAL PURPOSE WHEREAS T HE REVENUES APPEAL IN ITA NO. 804/JP/2016 IS DISMISSED. 30 . NOW, WE TAKE UP ASSESSEE AND REVENUESS APPEAL I.E. 254/JP/2015 & 296/JP/2015 PERTAINING TO THE A.Y. 2008-09 RESPECTI VELY. ASSESSEES APPEAL IN ITA 254/JP/2015 FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO. 254/JP/2015 PERTAINING TO THE A.Y. 2008-09. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEA L. 35 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY AO U/S 147 OF THE IT ACT. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF M INING LAND OF RS. 92,99,632/- AND LEASEHOLD LAND OF RS. 8,02,482/- AG GREGATING TO RS. 1,01,02,114/-. HE HAS FURTHER ERRED IN DISALLOWING THIS CLAIM ONLY ON THE BASIS OF THE FINDING OF HIS PREDECESSOR ON THIS ISSUE IN AY 2010-11 IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARLIER YEARS AND IN SUBSEQUENT YEARS UPTO AY 2009-10 IN REGULAR ASSESSM ENT PROCEEDINGS AND THAT THE CLAIM IS ALSO SUPPORTED BY THE DECISIO N OF ITAT, HYDERABAD BENCH IN CASE OF NMDC LTD. VS. JCIT IN IT A NO. 714/HYD/ 2012 DT. 28.02.2014. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO BY HOLDING THAT RECEIPTS FROM SALE OF CERS CA NNOT BE CONSIDERED AS INCOME DERIVED FROM THE BUSINESS OF POWER GENERA TION UNDERTAKING AND THEREFORE DEDUCTION U/S 80IA IS NOT ALLOWABLE O N SUCH RECEIPTS. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN REDUCING HE CLAIM OF DEDUCTION U/S 80IA BY RS. 5,91,46,480/- BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCO UNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION OF POWER UNITS IN NOT AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WINDM ILLS. 4.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN REDUCING THE CLAIM OF DEDUCTION U/S 80IA WITH REFERENCE TO THE RECEIPTS O F THE LIQUIDATED DAMAGES EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID REDUCTION IS NOT N THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147/ 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 14,20,35,074/-ON THE BASIS OF TURNOVER OF THE MININ G ACTIVITY AND WIND POWER GENERATION ACTIVITY OR ALLOWING DEDUCTION U/S 80IA ON THE INCOME FORM GENERATION OF POWER IGNORING THE FACT A ND EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 5.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 6. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 17,56,444/- OUT OF RURAL DEVELO PMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AD EXCLUSI VELY FOR THE PURPOSE OF BUSINESS. 6.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 7. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 1,138/- U/S 14A OF THE IT ACT, 1961. HE HAS 36 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. FURTHER ERRED IN CONFIRMING THE SAID DISALLOWANCE E VEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AN D THAT THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPIN G ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 8. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS. 3,15,50,975/- ON ACCOUNT OF UNPAID LAND TAX U/S 43B OF THE ACT IGNORING THE FACT THAT SAME IS ALREADY OFFERED FOR TAX IN AY 2010-11 AND ASSESSED BY THE AO. 9. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF THE APPEAL. 10. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE . 31. THE GROUNDS NO. 1,2,3,5 & 6 AS RAISED IN THIS APPE AL ARE IDENTICAL AS WERE IN THE ITA NO. 253/JP/2015 PERTAINING TO THE A.Y. 2007-08 . THE RESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT IN ITA NO. 253/JP/2015 FOR THESE GROUNDS. 32. GROUND NO. 1 IS AGAINST THE VALIDITY OF ORDER PASSED BY AO U/S 1 47 OF THE IT ACT. THE IDENTICAL GROUNDS WERE RAISED IN ITA NO 253/JP/2015 PERTAINING TO THE ASSESSEMENT YEAR 2007-08. THE RESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE IT A NO. 253/JP/2015. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THERE IS NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT THE ASSESSING OFFICER CAN REOPEN THE ASSESSMENT IF HE HAS REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR. IN THE PRESENT CASE, IN THE ORIGINAL ASSESSMENT, THE ASSES SING OFFICER HAD NOT CONSIDERED THE ISSUE OF ALLOWABILITY OF THE AMORTIZ ATION OF MINING LAND AND LEASEHOLD LAND. HE HAD SIMPLY WITHOUT MAKING ANY E NQUIRY ALLOWED THE CLAIM OF THE ASSESSEE, WHICH IS NOT THE MANDATE OF THE LAW. THEREFORE, WE DO 37 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF T HE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSEES APPE AL IS DISMISSED. 32.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSEE S APPEAL IS DISMISSED. 33. GROUND NO.2, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 253/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE IT A NO. 253/JP/2015. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 5.2 PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES SU BMITTED THAT THIS ISSUE WAS BEFORE THIS HONBLE TRIBUNAL IN APPEAL OF THE A SSESSEE PERTAINING TO THE YEAR 2010-11 IN ITA NO. 124/JP/2014. THE HONBLE T RIBUNAL WAS PLEASED TO REJECT THE CLAIM OF THE ASSESSEE. HE SUBMITTED TH AT THE ISSUE OF ALLOWABILITY OF EXPENDITURE IS U/S 37(1) OF THE ACT HAS ALREADY BEEN DECIDED AGAINST THE ASSESSEE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAS DECIDED THE IS SUE AGAINST THE ASSESSEE. THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDER:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN 38 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE 39 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 40 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 THE AO IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N TERMS INDICATED HEREINBEFORE. 33.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS DISPOSED OFF. 34. GROUND NO.3, THE GROUND AND THE FACTS ARE IDENTICAL AS WERE IN ITA NO. 253/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPE CTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN THE ITA NO. 253/JP/2015. WE HAVE DECIDED THIS GROUND BY OBSERV ING AS UNDER:- 6. AT THE TIME OF HEARING GROUND NO. 3 WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, GROUND NO. 3 IS DISMISSED AS NOT PRESSED. 34.1. FOR THE SAME REASONING, THIS GROUND IS DISMISSED A S NOT PRESSED. 35. GROUND NO.4 IS AGAINST THE CONFIRMING THE ACTION OF ASSESSING O FFICER IN RESPECT OF REDUCING THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT, BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCOUNT OF SHORT FAL L IN THE MINIMUM GUARANTEED GENERATION OF POWER UNITS IS NOT AN INCOME DERIVED FROM POWER GENERATION BUSINESS OF WIND MILLS AND GROUND NO. 4.1 IS AGAINST THE ACTION FOR REDUCING THE CLAIM U/S 80IA IN RESPECT OF LEVY LIQUIDATED DAMAGES DESPITE THE FACTS THAT THERE WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 OF T HE ACT. 35.1 SO FAR AS THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THIS WAS NOT THE ITEM IN THE REASON RECORDED FOR RE-OPENING OF T HE ASSESSEMENT. WE HAVE ALREADY DECIDED THIS ISSUE AGAINST THE ASSESSEE IN ANOTHER YEAR. THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE, IN RESPECT OF GROUND NO. 4, THE LD. COUNSEL OR THE ASSESSEE REITERATED THE S UBMISSIONS AS MADE IN THE WRITTEN 41 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SYNOPSIS. HE SUBMITTED THAT THE AUTHORITIES BELOW HAVE MISDIRECTED THEMSELVES FOR NOT ALLOWING THE CLAIM OF DEDUCTION U/S 80IA IN RES PECT OF THE LIQUIDATED DAMAGES. HE SUBMITTED THAT LIQUIDATED DAMAGES ARE THE CHARGE S PAID BY SUZLON ENERGY LTD. TO THE ASSESSEE DUE TO SHORT-FALL IN THE MINIMUM GUARA NTEED GENERATION OF POWER UNITS GIVEN BY IT. THESE CHARGES ARE NOTHING BUT THE INC OME FROM SALE OF POWER ONLY AS IT WAS THE COMMITMENT OF THE SUPPLIER OF THE WIND MILL THAT PLANT SUPPLIED BY HIM WOULD GENERATE MINIMUM GUARANTEED UNITS OF ELECTRIC ITY. IN CASE GENERATION IS LESS THAN FIXED GUARANTEED UNITS, THE SUPPLIER I.E. SUZL ON ENERGY LTD. WOULD FULFILL THE SHORTFALL BY MAKING PAYMENT OF FIXED AMOUNT PER UNI T WHICH IT GENERATED LESS. HENCE, AMOUNTS SO RECEIVED IS NOTHING BUT THE ADDIT IONAL AMOUNT REALIZED BY THE ASSESSEE IN RESPECT OF THE ELECTRICITY GENERATED BY ITS POWER PLANT. THE AMOUNT SO RECEIVED IS THEREFORE THE PROFIT OR GAIN DERIVED BY THE POWER UNDERTAKING FROM THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWER. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE JUDGMENT OF THE HONBLE MA DHYA PRADESH HIGH COURT RENDERED IN THE CASE OF CIT VS. PRAKASH OILS LTD. 5 8 DTR 276 (MP) ALSO THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ADVANCE DETERGENTS LTD. 339 ITR 81 (2011) (DEL.) FURTHER RELIANCE IS P LACED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MEGHAL AYA STEELS LTD. 383 ITR 217. THE LD. COUNSEL SUBMITTED THAT THE DAMAGES ARE DIRE CTLY LINKED WITH THE BUSINESS OF THE ASSESSEE. THEREFORE, THE DEDUCTION U/S 80IA IS ALLOWABLE ON THIS AMOUNT. 35.2 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE LD. CIT(A). 35.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DISALLOWED THE CLAIM ON THE BASIS THAT THE FIRST DEGREE IN 42 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NEXUS WITH THE OPERATION OF THE UNDERTAKING IS MISS ING. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAINING TO THE A .Y. 2010-11. ADMITTEDLY, THIS PAYMENT IS RELATED TO THE CONTRACT BETWEEN THE ASSE SSEE AND THE SUPPLIER. THE CONTRACT IS RELATED TO THE WIND MILL INDEPENDENT OF OPERATION OF THE WIND MILL THE PAYMENT OF LIQUIDATED DAMAGES WOULD NOT ARISE. IT IS ONLY ON THE OPERATION OF THE WIND MILL AND THE OUTPUT OF THE EQUIPMENT SO INSTAL LED THIS LIABILITY OF THE PAYMENT OF DAMAGES ARISES. IN THE ABSENCE OF OPERATION, THE ISSUE OF PAYMENT O F SUCH DAMAGES WOULD NOT ARISE. IT IS ONLY WHEN THE WIND MILL BECOMES OPERATIONAL O N SHORT FALL ON THE PRODUCTION SUCH PAYMENT IS MADE. HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. PRAKASH OILS LTD. (SUPRA) HELD THAT THE PAYMENT MAD E AS AN LIQUIDATED DAMAGES FOR NOT HONOURING THE CONTRACT FOR SALE OF OIL AND DEOI LED CAKE, SUCH INCOME IS DIRECTLY DERIVED FROM INDUSTRIAL UNDERTAKING, HENCE ELIGIBLE DEDUCTION U/S 80IA. IN OUR VIEW, THE LD. CIT(A) ERRED IN HOLDING THAT SUCH INCOME IS NOT DERIVE FROM THE BUSINESS OF THE UNDERTAKING. THEREFORE, WE DIRECT THE ASSESSIN G OFFICER TO ALLOW DEDUCTION U/S 80IA ON THIS RECEIPT. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 36 . GROUND NO. 5 TO 5.1, THE FACTS ARE IDENTICAL IN ITA NO. 253/JP/2015 PER TAINING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 253/JP /2015 AS GROUND NO. 4 TO 4.1. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO 43 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENSE RELATED TO OPERATION AND MAINTENANCE WERE B ORNE BY SUZLON ENERGIES LTD. SO FAR THE CONTENTION OF LD. COUNSEL FOR THE A SSESSEE THAT THIS ITEM WAS NOT SUBJECT MATTER OF THE REASONS RECORDED FOR REOP ENING. WE DO NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTHER ISSUES AS CROPPED UP THE ASSESSM ENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS DISMISSED. 36.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE, WITH REGARD TO THE CONTENTION THAT THE ENTIRE OPERATION AND MAINTENANCE GIVEN TO SUZLON ENERGIES LTD. 37. GROUND NO. 6 TO 6.1, THE GROUND AND THE FACTS ARE IDENTICAL AS WERE IN I TA NO. 253/JP/2015 PERTAINING TO THE AY 2007-08. THE R ESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN THE ITA NO. 44 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 253/JP/2015 AS GROUND NO. 5 TO 5.1. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 8. GROUND NOS. 5 TO 5.1 ARE AGAINST CONFIRMATION OF DISALLOWANCE OF RS. 1,20,47,954/- OUT OF RURAL DEVELOPMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. 8.1 APROPOS TO GROUND NO. 5.1, THE LD. COUNSEL SUBMITTED THAT THIS DISALLOWANCE HAS BEEN CONFIRMED EVEN WHEN IT WAS NO T A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 WHEN SUCH DISALLOWANCE I S NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 8.2 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT O NCE THE REOPENING IS VALIDLY DONE THE ASSESSING OFFICER IS WITHIN ITS PO WER AND MAKE ASSESSMENT IN RESPECT OF THE ISSUES WHICH WERE NOT EVEN TAKEN INT O CONSIDERATION WHILE ISSUANCE OF NOTICE U/S 148 AS AFTER REOPENING THE A SSESSING OFFICER WOULD HAVE THE SAME POWER AS IN THE ORIGINAL ASSESSMENT. 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAK E ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REO PENED ASSESSMENT PROCEEDINGS. NOW, COMING TO THE MERIT OF DISALLOWA NCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE ABSENCE OF MATERI AL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANN OT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 37.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS DISMISSED. 38 . APROPOS TO GROUND NO. 7 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. 45 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 38.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 38.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS CONTENDED THAT THE ASSESSEE HAD EARN ED TAX FREE DIVIDEND INCOME FROM SHARES OF RS. 10 LAKHS. IT IS STATED THAT NO EFFOR TS AND LOAN FUNDS WERE UTILIZED IN MAKING THE INVESTMENT. ACCORDINGLY, NO DISALLOWANC E IS CALLED FOR. IT IS STATED THAT THE ASSESSING OFFICER ACCEPTED THAT NO DIRECT EXPEN SES INCURRED. HOWEVER, HE DISALLOWED RS. 1,138/- BEING % OF THE AVERAGE INVE STMENT ON ACCOUNT OF ADMINISTRATIVE EXPENSES. 38.3 WE FIND MERIT INTO THE CONTENTIONS OF THE ASSESSEE THAT ON INVESTMENT OF RS. 1 LAKHS THE ASSESSEE HAD EARNED DIVIDEND INCOME ON RS . 10 LAKHS ONLY IN RESPECT OF THE SHARES OF MAYURA INORGANICS LTD. THIS FACT IS NOT DISPUTED BY THE REVENUE. IN OUR CONSIDERED VIEW, THE OPERATION OF RULE 8D IS NO T AUTOMATIC. THE ASSESSING OFFICER IS REQUIRED TO SATISFY HIMSELF ABOUT THE CO RRECTNESS OF THE CLAIM THAT NO EXPENDITURE WAS INCURRED BY THE ASSESSEE. THE ASSE SSING OFFICER IN THE PRESENT CASE HAS ACCEPTED THAT THERE IS NOT DIRECT NEXUS BETWEEN THE INVESTMENT AND EXPENSES SO INCURRED. AFTER CONSIDERING THE TOTALITY OF THE FA CT AND KEEPING IN VIEW THE SUM OF RS. 1,138/- HAD BEEN DISALLOWED BY INVOKING THE PRO VISION OF RULE 8D WITHOUT BEING SATISFIED ABOUT THE CLAIM OF THE ASSESSEE THAT NO A DMINISTRATIVE EXPENSES WERE INCURRED FOR EARNING OF THE EXEMPT INCOME. WE DIREC T THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APP EAL IS ALLOWED. 39. GROUND NO. 8 IS AGAINST CONFIRMATION OF ADDITION OF RS. 3,15,50 ,975/- ON ACCOUNT OF UNPAID LAND TAX U/S 43B OF THE ACT IGNO RING THE FACT THAT SAME IS ALREADY OFFERED FOR TAX IN AY 2010-11 AND ASSESSED BY THE A O. THE LD. COUNSEL FOR THE 46 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE RELEVANT CONTENTIONS OF THE ASSESEE ARE REPRODUCED AS UNDER: - 4. IT MAY BE NOTED THAT THOUGH RS. 3,15,50,975/- RE MAINED UNPAID AS ON 31-03-2008 BUT SUCH AMOUNT HAS BEEN WRITTEN BACK AN D OFFERED FOR TAX IN AY 2010-11. THIS WAS EXPLAINED TO THE AO VIDE L ETTER DATED 30.9.2013 (PB 41). IN AY 2010-11 THE AMOUNT SO WRI TTEN BACK HAS BEEN TAXED BY THE AO. THE ASSESSMENT FOR AY 10-11 HAS BECOME FINAL. THUS, THIS AMOUNT HAS BEEN TAXED TWICE, ONCE IN AY 2008-09 WHEN THE AO HAS DISALLOWED IT AGAINT IN AY 2010-11 WHERE ASS ESSEEE HAS OFFERED IF FOR TAX. THE SUPREME COURT IN CASE OF EXCEL IN DUSTRIES LIMITED 358 ITR 290 HAS HELD THAT WHEN THE RATE OF TAX REMAINED THE SAME IN PRESENT AY AS WELL AS IN SUBSEQUENT AY, THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADEMIC OR AT BEST MAY HAVE A MINOR TAX EFFECT. THERE WAS, THEREFORE, NO NEED FOR THE REVENUE TO CO NTINUE WITH THE LITIGATION WHEN IT WAS QUITE CLEAR THAT NOT ONLY WA S IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHIN G MUCH TO THE PUBLIC COFFERES. CONSIDERING THIS JUDGMENT OF SUPR EME COURT AND THE FACT THAT ASSESSEE HAS OFFERED THIS AMOUNT FOR TAX IN AY 10-11 WHICH HAS BECOME FINAL, THE ADDITION CONFIRMED BY THE CIT (A) HAS RESULTED INTO DOUBLE TAXATION AND THEREFORE THE ADDITION SO CONFIRMED BY HIM NEEDS TO BE DELETED. 39.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THERE IS NO IL LEGALITY INTO THE ORDER OF THE AUTHORITIES BELOW. 39.2 WE HAVE HEARD THE RIVAL CONTENTIONS, IT IS UNDISPU TED FACT THAT THE LAND TAX WAS NOT PAID BEFORE DUE DATE OF FILING BY THE RETUR N OF INCOME U/S 139(1) AS REQUIRED BY THE PROVISIONS OF SECTION 43B. IN VIEW OF THE M ANDATE OF CLAUSE (A) OF SECTION 47 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 43B OF THE ACT, WE DO NOT SEE ANY REASON TO INTERFE RE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THE GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 40. GROUND NO. 9 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 41. GROUND NO. 10 IS PRAYER OF AWARDED COST, NO SUPPORTING EVIDENCE IS PLACED BY THE ASSESSEE IN SUPPORT OF THIS CLAIM AND IDENTI CAL CLAIM WAS MADE IN ITA NO. 253/JP/2015. 10. GROUND NO. 7 IS PRAYER FOR COST; THE ASSESSEE H AS NOT ADDRESSED ANY ARGUMENT TO DEMONSTRATED AS TO WHY COST SHOULD BE A WARDED. HENCE, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 41.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 254/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. REVENUES APPEAL IN ITA NO. 296/JP/2015 42 . NOW WE TAKE UP REVENUES APPEAL IN ITA NO. 296/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE OF RS. 88,60,842/- BY HOLDING THAT RECEIPTS FROM SALE OF C ARBON EMISSION CERTIFICATES ARE OF CAPITAL IN NATURE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE U/S 80IA AMOUNTING TO RS. 2,33,19,587/- BY NOT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER WITH REGARD TO ES TABLISHMENT AND FINANCIAL EXPENSES. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS. 3,07 ,81,040/- ON A/C OF EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD RURAL DEVELOPMENT AND RS. 59,09,228/- UNDER THE HEAD AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES WITHOUT APPREC IATING THE FACT 48 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THAT THESE EXPENSES HAVE NOT BEEN INCURRED IN CONNE CTION WITH THE BUSINESS OF THE ASSESSEE. 4. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 43. GROUND NO. 1, THE FACTS AND GROUND ARE IDENTICAL AS WERE IN ITA NO. 295/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPE CTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 1. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 12.3 SINCE, THE LD. CIT(A) HAS FOLLOWED THE JUDGME NT OF THE HONBLE ANDHRA PRADESH HIGH COURT RENDERED IN THE CASE OF MY HOME POWER LTD. 365 ITR 82(SUPRA) WHERE THE HONBLE COURT, UNDER THE IDENTI CAL FACTS CONFIRMED THE VIEW OF THE TRIBUNAL IN HOLDING THAT CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVIRONMENTAL CONCERNS. NO ASSET IS GENERATED IN COST OF BUSINESS BUT IT IS GENERATED DUE TO ENVIRON MENTAL CONCERNS. THEREFORE, ON SALE OF EXCESS CARBON CREDITS CORRECT LY HELD BY THE TRIBUNAL AS A CAPITAL RECEIPT. IN VIEW OF THE JUDGMENT OF HONVB LE ANDHRA PRADESH HIGH COURT, WE DO NOT SEE ANY REASON TO DISTURB THE FIND ING OF LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND OF REVENUES APPEAL I S DISMISSED. 43.1 FOR THE SAME REASONING, THIS GROUND OF THE REVENUE S APPEAL IS DISMISSED. 44. GROUND NO. 2, THE FACTS AND GROUND ARE IDENTICAL AS WERE IN ITA NO. 295/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPE CTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 2. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 49 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENSES RELATED TO OPERATION AND MAINTENANCE WERE BORNE BY SUZLON ENERGIES LTD. SO FAR THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT THIS ITEM WAS NOT SUBJECT MATTER OF THE REASONS RECORDED FOR REOPENING. WE DO NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTHER ISSUES AS CROPPED UP TH E ASSESSMENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE ASSESSEE S APPEAL IS ALL OWED FOR STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS DISMISSED. 13.3 THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. 44.1 FOR THE SAME REASONING, THIS GROUND OF THE REVENUE S APPEAL IS RESTORED TO THE FILE OF THE AO FOR DECISION AFRESH. 45. GROUND NO. 3, THE FACTS ARE IDENTICAL IN ITA NO. 295/JP/2015 PER TAINING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVE OF TH E PARTIES HAVE ADOPTED THE 50 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 3. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NO T RELATABLE TO THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES EE REITERATED THE SUBMISSIONS AD MADE IN THE WRITTEN BRIEF. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE 51 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 45.1 FOR THE SAME REASONING, THIS GROUND OF THE REVENUE S APPEAL IS DISMISSED. 46. GROUND NO. 4 , IS GENERAL IN NATURE NEEDS NO SEPARATE ADJUDICATI ON. 47. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 296/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 255/JP/2015 & ITA NO. 297/JP/2015 48. NOW WE TAKE UP CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE I.E. IN ITA NO. 255/JP/2015 & 297/JP/2015 PERTAINING TO THE A.Y . 2009-10. FIRST WE TAKE UP ASSESSEE APPEAL IN ITA NO. 255/JP/2015 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN LA W IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY AO U/S 147 OF THE I T ACT. 2. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF MINING LAND OF RS. 92,99,632/- LEASEHOLD LAND OF RS. 7,99,470/- AGGREG ATING TO RS. 52 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1,00,99,102/-. HE HAS FURTHER ERRED IN DISALLOWING THIS CLAIM ONLY ON THE BASIS OF THE FINDING OF HIS PREDECESSOR ON THIS ISSUE IN AY 2010-11 IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARLIER YEARS AY 2009-10 IN REGULAR ASSESSMENT PROCEEDINGS AND THAT THE CLAIM I S ALSO SUPPORTED BY THE DECISION OF ITAT, HYDERABAD BENCH IN CASE OF NMDC LTD. VS. JCIT IN ITA NO. 714/HYD/ 2012 DT. 28.02.2014. 2.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN REDUCING THE CLAIM OF DEDUCTION U/S 80IA B Y RS. 1,68,53,256/- BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCO UNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION OF POWER UNITS IS NOT AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WINDM ILLS. 3.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN REDUCING CLAIM OF DEDUCTION U/S 80IA WITH REFERENCE TO THE RECEIPTS O F THE LIQUIDATED DAMAGED EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE O NOTICE U/S 148 AND THAT THE SAID REDUCTION IS NOT IN THE N ATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 4. THE LD. CIT(A) HAS ERRED ON FACTS AN IN LAW IN D IRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 21,24,40,947/- ON THE BASIS OF TURNOVER OF THE MINI NG ACTIVITY AND WIND POWER GENERATION ACTIVITY FOR ALLOWING DEDUCTION U/ S 80IA ON THE INCOME FROM GENERATION OF POWER IGNORING THE FACT T HAT EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 4.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NO T IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 5. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN C ONFIRMING THE DISALLOWANCE OF RS. 17,95,838/- OUT OF RURAL DEVELO PMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS. 5.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS N OT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 6. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 3,612 U/S 14A OF THE IT ACT, 19 61. HE HAS FURTHER ERRED IN CONFIRMING THE SAID DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THAT THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPIN G ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 7. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS. 35,51,084/- ON ACCOUNT OF UNPAID LAND TAX U/ S 43B OF THE ACT 53 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. IGNORING THE FACT THAT SAME IS ALREADY OFFERED FOR TAX IN AY 2011-12 AND ASSESSED BY THE AO. 8. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND OR ANY OF THE GROUNDS OF THE APPEAL. 9. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 49. GROUND NO. 1 IS AGAINST THE VALIDITY OF THE ORDER PASSED U/S 14 8 OF THE IT ACT. THE RESPECT REPRESENTATIVES OF THE PARTIES AD OPTED THE SAME ARGUMENT AS WERE IN THE ITA NO. 253/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2007-08 . THE ISSUE IN ITA NO. 253/JP/2015 PERTAINING TO THE VALIDITY OF THE ORDER DECIDED (IN PARA 4 TO 4.2) AGAINST THE ASSESSEE BY OBSERVING AS UNDER:- 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THERE IS NO DISPUTE WITH REGARD TO THE POSITION OF LAW THAT THE ASSESSING OFFICER CAN REOPEN THE ASSESSMENT IF HE HAS REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR. IN THE PRESENT CASE, IN THE ORIGINAL ASSESSMENT, THE ASSES SING OFFICER HAD NOT CONSIDERED THE ISSUE OF ALLOWABILITY OF THE AMORTIZ ATION OF MINING LAND AND LEASEHOLD LAND. HE HAD SIMPLY WITHOUT MAKING ANY E NQUIRY ALLOWED THE CLAIM OF THE ASSESSEE, WHICH IS NOT THE MANDATE OF THE LAW. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF T HE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSEES APPE AL IS DISMISSED. 49.1 TAKING A CONSISTENT VIEW, THIS GROUND OF THE ASSES SEES APPEAL IS DISMISSED. 50. GROUND NO. 2 TO 2.1 IS AGAINST CONFIRMATION OF DISALLOWANCE OF AMORTIZ ATION OF EXPENSES OF MINING LAND AND LEASEHOLD LAND. GRO UND NO. 2.1 IS WITH REGARD TO THE CONFIRMATION OF DISALLOWANCE EVEN WHEN ISSUE WAS NO T RECORDED IN THE REASONS FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT. THE LD. RES PECTIVE REPRESENTATIVES OF THE 54 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN ITA NO. 253/JP/2015 QUA THE GROUND NO. 2 THEREIN. 50.1 WE HAVE HEARD THE RIVAL CONTENTIONS; THE ISSUE IN THIS YEAR IS IDENTICAL AS WAS IN THE ASSESSMENT YEAR 2007-08 IN ITA NO. 253/JP/2015 AS G ROUND NO. 2 . WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 5.2 PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES SUB MITTED THAT THIS ISSUE WAS BEFORE THIS HONBLE TRIBUNAL IN APPEAL OF THE A SSESSEE PERTAINING TO THE YEAR 2010-11 IN ITA NO. 124/JP/2014. THE HONBLE T RIBUNAL WAS PLEASED TO REJECT THE CLAIM OF THE ASSESSEE. HE SUBMITTED TH AT THE ISSUE OF ALLOWABILITY OF EXPENDITURE IS U/S 37(1) OF THE ACT HAS ALREADY BEEN DECIDED AGAINST THE ASSESSEE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAS DECIDED THE IS SUE AGAINST THE ASSESSEE. THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDER:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] 55 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE 56 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE 57 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N THE TERMS INDICATED HEREINBEFORE. 50.2 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS DISPOSED OFF. SO FAR AS THE CONTENTION THAT THE ISSUE WAS NOT SUB JECT MATTER OF REASONS RECORDED IS CONCERNED, WE HAVE ALREADY DECIDED THIS ISSUE BY HO LDING THAT ONCE THE ASSESSMENT IS VALIDLY RE-OPENED THE AO CAN DECIDED OTHER ISSUE S AS WELL. HENCE, THE GROUND NO. 2.1 IS DISMISSED. 51. GROUND NO. 3 IS AGAINST REDUCING THE CLAIM OF DEDUCTION U/S 80I A BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCOUNT OF SHOR TFALL IN THE MINIMUM GUARANTEED GENERATION OF THE POWER UNITS IS NOT AN INCOME DERI VED FROM THE POWER GENERATION BUSINESS OF WINDMILLS. 51.1 GROUND NO. 3.1 IS CONNECTED TO GROUND NO. 3, WHICH IS AGAINST RED UCING THE CLAIM WHEN THE ISSUE WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 AND THE REDUCTION IS NOT IN THE NATURE OF INCOME ESCAPI NG ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 51.2 THE IDENTICAL GROUNDS WERE RAISED IN ITA NO 254/JP/2015 PERTAINING TO THE ASSESSEMENT YEAR 2008-09. THE RESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN T HE ITA NO. 254/JP/2015. WE HAVE HEARD THE RIVAL CONTENTIONS, IN ITA NO. 254 /JP/2015 PERTAINING TO THE AY 2008-09 , WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 35.1 SO FAR AS THE CONTENTION OF THE LD. COUNSEL FO R THE ASSESSEE THAT THIS WAS NOT THE ITEM IN THE REASON RECORDED FOR RE-OPEN ING OF THE ASSESSEMENT. WE HAVE ALREADY DECIDED THIS ISSUE AGAINST THE ASSE SSEE IN ANOTHER YEAR. THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSUE IS DECIDED AGAINST THE 58 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ASSESSEE, IN RESPECT OF GROUND NO. 4, THE LD. COUNS EL OR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN S YNOPSIS. HE SUBMITTED THAT THE AUTHORITIES BELOW HAVE MISDIRECTED THEMSEL VES FOR NOT ALLOWING THE CLAIM OF DEDUCTION U/S 80IA IN RESPECT OF THE LIQUI DATED DAMAGES. HE SUBMITTED THAT LIQUIDATED DAMAGES ARE THE CHARGES P AID BY SUZLON ENERGY LTD. TO THE ASSESSEE DUE TO SHORT-FALL IN THE MINIM UM GUARANTEED GENERATION OF POWER UNITS GIVEN BY IT. THESE CHARGES ARE NOTH ING BUT THE INCOME FROM SALE OF POWER ONLY AS IT WAS THE COMMITMENT OF THE SUPPLIER OF THE WIND MILL THAT PLANT SUPPLIED BY HIM WOULD GENERATE MINIMUM G UARANTEED UNITS OF ELECTRICITY. IN CASE GENERATION IS LESS THAN FIXED GUARANTEED UNITS, THE SUPPLIER I.E. SUZLON ENERGY LTD. WOULD FULFILL THE SHORTFALL BY MAKING PAYMENT OF FIXED AMOUNT PER UNIT WHICH IT GENERATED LESS. HENCE, AM OUNTS SO RECEIVED IS NOTHING BUT THE ADDITIONAL AMOUNT REALIZED BY THE A SSESSEE IN RESPECT OF THE ELECTRICITY GENERATED BY ITS POWER PLANT. THE AMOU NT SO RECEIVED IS THEREFORE THE PROFIT OR GAIN DERIVED BY THE POWER UNDERTAKING FROM THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWER. THE LD. COUN SEL FOR THE ASSESSEE PLACED RELIANCE UPON THE JUDGMENT OF THE HONBLE MA DHYA PRADESH HIGH COURT RENDERED IN THE CASE OF CIT VS. PRAKASH OILS LTD. 5 8 DTR 276 (MP) ALSO THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ADVANCE DETERGENTS LTD. 339 ITR 81 (2011) (DEL.) FURTHER RE LIANCE IS PLACED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. MEGHALAYA STEELS LTD. 383 ITR 217. THE LD. COUNSEL SUBMITTED THAT THE DAMAGES ARE DIRECTLY LINKED WITH THE BUSINESS OF THE ASSESSEE. THEREFORE, THE DEDUCTION U/S 80IA IS ALLOWABLE ON THIS AMOUNT. 35.2 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES SUPPORTED THE ORDER OF THE LD. CIT(A). 35.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DISALLOWED THE CLAIM ON THE BASIS THAT THE FIRST DEGREE NEXUS WITH THE OPERATION OF THE UNDERTAKING IS MISS ING. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAINING TO THE A.Y. 2010-11. ADMITTEDLY, THIS PAYMENT IS RELATED TO THE CONTRACT BETWEEN THE ASSESSEE AND 59 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THE SUPPLIER. THE CONTRACT IS RELATED TO THE WIND MILL INDEPENDENT OF OPERATION OF THE WIND MILL THE PAYMENT OF LIQUIDATE D DAMAGES WOULD NOT ARISE. IT IS ONLY ON THE OPERATION OF THE WIND MIL L AND THE OUTPUT OF THE EQUIPMENT SO INSTALLED THIS LIABILITY OF THE PAYMEN T OF DAMAGES ARISES. IN THE ABSENCE OF OPERATION, THE ISSUE OF PAYMENT O F SUCH DAMAGES WOULD NOT ARISE. IT IS ONLY WHEN THE WIND MILL BECOMES OPERA TIONAL ON SHORT FALL ON THE PRODUCTION SUCH PAYMENT IS MADE. HONBLE MADHYA PR ADESH HIGH COURT IN THE CASE OF CIT VS. PRAKASH OILS LTD. (SUPRA) HELD THA T THE PAYMENT MADE AS AN LIQUIDATED DAMAGES FOR NOT HONOURING THE CONTRACT F OR SALE OF OIL AND DEOILED CAKE, SUCH INCOME IS DIRECTLY DERIVED FROM INDUSTRI AL UNDERTAKING, HENCE ELIGIBLE DEDUCTION U/S 80IA. IN OUR VIEW, THE LD. C IT(A) ERRED IN HOLDING THAT SUCH INCOME IS NOT DERIVE FROM THE BUSINESS OF THE UNDERTAKING. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IA ON THIS RECEIPT. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 51.3 SO FAR AS THE CONTENTION THAT THE ISSUE WAS NOT SU BJECT MATTER OF REASONS RECORDED IS CONCERNED, WE HAVE ALREADY DECIDED THIS ISSUE BY HOLDING THAT ONCE THE ASSESSMENT IS VALIDLY RE-OPENED THE AO CAN DECIDED OTHER ISSUES AS WELL. HENCE, THE GROUND NO. 3.1 IS DISMISSED. TAKING A CONSISTENT VIEW, THIS GROUND NO. 3 OF THE ASSESSEES APPEAL IS ALLOWED. 52. GROUND NO. 4 AND 4.1 ARE IN RESPECT OF APPORTIONMENT THE ESTABLISHMENT AND FINANCIAL EXPENDITURE ON THE BASIS OF TURNOVER. GROUND NO. 4.1 IS CONNECTED WITH GROUND NO. 4, WHICH IS AGAINST THE CONFIRMATION OF DISALLOWANCE EVEN WHEN IT WAS NOT A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 14 8 AND THAT THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 60 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 52.1 THE IDENTICAL GROUND WAS RAISED IN ITA NO. 253/JP/ 2015 PERTAINING TO THE ASSESSMENT YEAR 2007-08. THE RESPECTIVE REPRESENTAT IVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE IT A NO. 253/JP/2015. 52.2 WE HAVE HEARD THE RIVAL CONTENTIONS, IN ITA NO. 25 3/JP/2015 PERTAINING TO THE AY 2007-08 , WE HAVE DECIDED THIS GROUND BY OBSERVI NG AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE HAS STATED THAT IN RESPECT OF THE UNALLOCA TED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAS BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAS NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. IS REQU IRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENSE RELATED TO OPERATION AND MAINTENANCE HAS BE EN GIVEN TO SUZLON ENERGIES LTD. SO FAR THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT THIS ITEM WAS NOT SUBJECT MATTER OF THE REASONS RECORDED FOR REOPENING. WE DO NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTHER ISSUES AS CROPPED UP TH E ASSESSMENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE ASSESSEE S APPEAL IS ALL OWED FOR STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS DISMISSED. 61 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 52.3 FOR THE SAME REASONING GROUND NO. 4 OF THE ASSESSE ES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES AND THE AO IS DIRECTED TO VERI FY THE CLAIM OF THE ASSESSEE, WHILE DECIDING THE ISSUE AFRESH. HOWEVER, THE GROUND NO. 4.1 IS DISMISSED. 53. GROUND NO. 5 TO 5.1 IS AGAINST CONFIRMATION THE DISALLOWANCE OF RURAL DEVELOPMENT EXPENSES. THE IDENTICAL ISSUE WAS RAISE D IN 235/JP/2015 AS GROUND NO. 5 TO 5.1, THE LD. REPRESENTATIVES OF THE PARTIES HA VE ADOPTED THE SAME ARGUMENT AS WERE IN ITA NO. 253/JP/2015. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 8.1 APROPOS TO GROUND NO. 5.1, THE LD. COUNSEL SUBMITTED THAT THIS DISALLOWANCE HAS BEEN CONFIRMED EVEN WHEN IT WAS NO T A REASON RECORDED FOR ISSUANCE OF NOTICE U/S 148 WHEN SUCH DISALLOWANCE I S NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. 8.2 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT O NCE THE REOPENING IS VALIDLY DONE THE ASSESSING OFFICER IS WITHIN ITS PO WER TO MAKE ASSESSMENT IN RESPECT OF THE ISSUES WHICH WERE NOT EVEN TAKEN INT O CONSIDERATION WHILE ISSUANCE OF NOTICE U/S 148 AS AFTER REOPENING THE A SSESSING OFFICER WOULD HAVE THE SAME POWER AS IN THE ORIGINAL ASSESSMENT. 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAK E ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REO PENED ASSESSMENT PROCEEDINGS. NOW, COMING TO THE MERIT OF DISALLOWA NCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE ABSENCE OF MATERI AL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANN OT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 62 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 53.1 THEREFORE, TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED, THESE GROUNDS OF THE ASSESSEES APPEAL ARE DISMISSED. 54. GROUND NO. 6 IS AGAINST CONFIRMATION THE DISALLOWANCE MADE U/S 14A OF RS. 3,612/-. SIMILARLY, THE GROUND WAS RAISED IN ITA NO 254/JP/2015 PERTAINING TO THE AY 2008-09. THE LD. REPRESENTATIVE OF THE PARTIES H AVE ADOPTED THE SAME ARGUMENT AS WERE IN ITA NO.254/JP/2015 AS GROUND NO. 7. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 38. APROPOS TO GROUND NO. 7 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. 38.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 38.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. IT IS CONTENDED THAT THE ASSESSEE HAD EARN ED TAX FREE DIVIDEND INCOME FROM SHARES OF RS. 10 LAKHS. IT IS STATED T HAT NO EFFORTS AND LOAN FUNDS WERE UTILIZED IN MAKING THE INVESTMENT. ACCO RDINGLY, NO DISALLOWANCE IS CALLED FOR. IT IS STATED THAT THE ASSESSING OFFICE R ACCEPTED THAT NO DIRECT EXPENSES INCURRED. HOWEVER, HE DISALLOWED RS. 1,13 8/- BEING % OF THE AVERAGE INVESTMENT ON ACCOUNT OF ADMINISTRATIVE EXP ENSES. 38.3 WE FIND MERIT INTO THE CONTENTIONS OF THE ASSE SSEE THAT ON INVESTMENT OF RS. 1 LAKHS THE ASSESSEE HAD EARNED DIVIDEND IN COME ON RS. 10 LAKHS ONLY IN RESPECT OF THE SHARES OF MAYURA INORGANICS LTD. THIS FACT IS NOT DISPUTED BY THE REVENUE. IN OUR CONSIDERED VIEW, THE OPERATION OF RULE 8D IS NOT AUTOMATIC. THE ASSESSING OFFICER IS REQUIRED TO SA TISFY HIMSELF ABOUT THE CORRECTNESS OF THE CLAIM THAT NO EXPENDITURE WAS IN CURRED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE PRESENT CASE HAS ACCEP TED THAT THERE IS NOT DIRECT NEXUS BETWEEN THE INVESTMENT AND EXPENSES SO INCURR ED. AFTER CONSIDERING THE TOTALITY OF THE FACT AND KEEPING IN VIEW THE SU M OF RS. 1,138/- HAD BEEN DISALLOWED BY INVOKING THE PROVISION OF RULE 8D WIT HOUT BEING SATISFIED ABOUT 63 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THE CLAIM OF THE ASSESSEE THAT NO ADMINISTRATIVE EX PENSES WERE INCURRED FOR EARNING OF THE EXEMPT INCOME. WE DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 54.1 TAKING A CONSISTENT VIEW, IN THIS YEAR, THE AO IS D IRECTED TO DELETE THE DISALLOWANCE. GROUND NO. 6 OF THE ASSESSEES APPEA L IS ALLOWED. 55. GROUND NO. 7 IS AGAINST CONFIRMATION OF ADDITION OF RS. 35,51,0 84/- ON ACCOUNT OF UNPAID LAND U/S 43B OF THE ACT. SIMILAR GROUND WAS RAISED IN ITA NO. 254/JP/2015 PERTAINING TO AY 2008-09 AS GROUND NO. 8. THE LD. REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE IN ITA NO. 254/JP/2015 AS GROUND NO. 8. WE HAVE DECIDED THIS GROUND OF APPEAL BY OBSERVIN G AS UNDER:- 39.2 WE HAVE HEARD THE RIVAL CONTENTIONS, IT IS UN DISPUTED FACT THAT THE LAND TAX WAS NOT PAID BY DUE DATE OF FILING BY THE RETUR N OF INCOME U/S 139(1) AS REQUIRED BY THE PROVISIONS OF SECTION 43B. IN VIEW OF THE MANDATE OF CLAUSE (A) OF SECTION 43B. WE DO NOT SEE ANY REASON TO IN TERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THE GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 55.1 THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES. THEREFORE TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERF ERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THE GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 56. GROUND NO. 8 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 57. GROUND NO. 9 IS PRAYER FOR COST, THE ASSESSEE HAS NOT PLACED AN Y MATERIAL ON RECORD UNDER THE FACTS OF THE PRESENT CASE, WE DO N OT SEE ANY REASON TO AWARD THE COST TO ASSESSEE. THEREFORE, WE DO NOT SEEN ANY R EASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GR OUND OF THE ASSESSEES APPEAL IS DISMISSED. 64 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 58. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 2 55/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. REVENUES APPEAL IN ITA NO. 297/JP/2015 59. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO. 297/JP /2015. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 95,64,749/- OUT OF EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD OF RURAL DEVELOPMENT EXPENSES. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 64,01,492/- UNDER THE HEAD AFFORESTATION, PLANTATION AND ENVIRONMENT EX PENSES WITHOUT APPRECIATING THE FACT THAT THESE EXPENSES HAVE NOT BEEN INCURRED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE U/S 80IA AMOUNTING TO RS. 1,85,03,376/- BY NOT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER WITH REGARD TO ES TABLISHMENT AND FINANCIAL EXPENSES. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN PARTLY ALLOWING THE APP EAL OF THE ASSESSEE BY HOLDING THAT THE PAYMENT OF MR CESS TO THE STATE GOVERNMENT IS A LIABILITY OF THE ASSESSEE INDEPENDENT OF ITS CUSTOM ERS AND IS COVER U/S 43B OF THE INCOME TAX ACT, 1961. 5. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 60. GROUND NO. 1 IS ALLOWING THE RELIEF ON EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD RURAL DEVELOPMENT EXPENSES. SIMIL AR GROUND WAS RAISED IN ITA NO. 295/JP/2015 BY THE REVENUE PERTAINING TO AY 2007-08 AS GROUND NO. 3. WE HAVE DECIDED THE ISSUE BY OBSERVING AS UNDER AGAINST THE REVENUE. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 65 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE 66 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 60.1 SINCE NO CHANGE INTO FACTS AND CIRCUMSTANCES WAS P OINTED OUT. THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND OF THE REVENU ES APPEAL IS DISMISSED. 61. GROUND NO.2, IS AGAINST ALLOWING RELIEF O RS. 64,01,492/- UNDER THE HEAD AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES . WE FIND THAT IDENTICAL GROUND WAS RAISED IN ITA NO. 295/JP/2015, WHEREIN THE ISSU E HAS BEEN DECIDED AGAINST THE REVENUE AS GROUND NO. 3 BY OBSERVING AS UNDER:- 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NO T RELATABLE TO THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES EE REITERATED THE SUBMISSIONS AD MADE IN THE WRITTEN BRIEF. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF 67 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING E NVIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 61.1 TAKING A CONSISTENT VIEW, AS NO CHANGE INTO FACTS AND CIRCUMSTANCES WERE POINTED OUT BY THE REVENUE. THEREFORE, WE DO NOT SE E ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRME D, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 68 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 62. GROUND NO. 3 IS AGAINST ALLOWING THE RELIEF TO THE ASSESSEE U/S 80IA AMOUNTING TO RS. 1,85,03,376/- BY NOT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER WITH REGARD TO ESTABLISHMENT AN D FINANCIAL EXPENSES. THE IDENTICAL GROUND WAS RAISED IN ITA NO. 295/JP/2 015, PERTAINING TO THE A.Y. 2007-08 AS GROUND NO. 2 BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENSES RELATED TO OPERATION AND MAINTENANCE WERE BORNE BY SUZLON ENERGIES LTD. THUS, GROUND NO. 4 TO 4.1 OF THE ASSE SSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 13.3 THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. 69 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 62.1 FOR THE SAME REASONING, THIS GROUND IS RESTORED TO THE FILE OF THE AO FOR DECISION AFRESH. 63. GROUND NO. 4 IS AGAINST PARTLY ALLOWING THE APAPEAL OF THE ASSE SSEE BY HOLDING THAT THE PAYMENT OF MR CESS TO THE STATE GO VERNMENT IS A LIABILITY OF THE ASSESSEE INDEPENDENT OF ITS CUSTOMERS. THE LD. DEP ARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE AO. HE SUBMITTED THAT M R CESS IS INDIRECT TAX COLLECTED THROUGH CUSTOMER AT THE TIME OF SALE AT THE RATE SP ECIFIED BY THE STATE GOVERNMENT. 63.1. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND SUBMITTED THAT THE AD DITION HAS BEEN MADE BY THE AO FOR THE DIFFERENCE IN MR CESS PAID AND THE MR CESS RECOVERED FROM THE CUSTOMERS. PAYMENT OF MR CESS TO THE GOVERNMENT IS AN INDEPEND ENT LIABILITY OF THE ASSESSEE. THE RECOVERY OF MR CESS FROM ITS CUSTOMER IS INDEPE NDENT OF ITS LIABILITY OF PAYMENT OF SUCH CESS TO THE GOVERNMENT. THEREFORE, WHETHER THE ASSESSEE COULD COLLECT THE MR CESS FROM ITS CUSTOMER OR NOT WOULD NOT REDUCED HIS LIABILITY OF THE PAYMENT OF THE SAME. THERE IS NO DISPUTE AS TO THE FACT THAT ASSESSEE HAS PAID MR CESS OF RS. 60,31,23,017/- TO THE GOVERNMENT IN THE YEAR UNDER CONSIDERATION BUT COULD RECOVER ONLY RS. 13,99,44,564/- FROM ITS CUSTOMERS WHICH WA S CREDITED TO INCOME. HE SUBMITTED THAT THE OBSERVATION OF THE AO THAT SINCE THE ASSESSEE HAD NOT COLLECTED DIFFERENCE FROM ITS CUSTOMERS TO THIS EXTENT THE AM OUNT WAS NOT PAYABLE U/S 43B IS FAR FETCHED IN THE ABSENCE OF ANY STATUTORY PROVISI ONS. 63.2 WE HAVE HEARD THE RIVAL CONTENTIONS, THE LD. CIT(A ) HAS DECIDED THIS ISSUE IN PARA 8.3 OF HIS ORDER WHICH IS REPRODUCED HEREIN FO R THE SAKE OF CLARITY:- 8.3 I HAVE PERUSED THE FACTS OF THE CASE, HE ASSES SMENT ORDER AND THE SUBMISSION OF THE APPELLANT. MR CESS WAS IMPOSED B Y THE GOVERNMENT 70 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. OF RAJHASTHAN W.E.F. 25.02.2008 ON DISPATCH OF CERT AIN MINERALS, INCLUDING ROCK PHOSPHATE. THEREAFTER, ON 23.01.200 9, THE MR CESS ON ROCK PHOSPHATE WAS INCREASED FROM RS. 35 PER TON TO RS. 500 PER TON WITH RETROSPECT EFFECT FROM 01.04.2008. THEREFORE, PRIOR TO 23.01.2009, ROCK PHOSPHATE HAS BEEN DISPATCHED FROM THE MINES WITH A LEVY OF MR CESS OF ONLY RS. 35 PER TON. HOWEVER, FROM 23.1.2009, THE ASSESSEE WAS UNDER OBLIGATION TO PAY TO THE GOV ERNMENT OF RAJASTHAN, MR CESS @ RS. 500 PER TON FOR THE ROCK P HOSPHATE WHICH HAS BEEN DISPATCHED FROM 01.04.2008 TO 22.01.2009 I RRESPECTIVE OF WHETHER IT WAS ABLE TO RECOVER THIS AMOUNT FROM ITS CUSTOMERS. THE APPELLANT HAS DEBITED EXPENDITURE TOWARDS MR CESS O F RS. 60,31,23,017/- WHEREAS IT WAS ABLE TO RECOVER AN AM OUNT OF RS. 13,99,44,564/- ONLY, FROM ITS CUSTOMERS(WHICH HAS B EEN CREDITED IN ITS P & L ACCOUNT). THE APPELLANT HAS STATED THAT THE BALANCE AMOUNT OF RS. 46,26,42,839/- COULD NOT BE COLLECTED AS ITS CU STOMERS WENT TO THE COURT AGAINST RECOVERY OF MR CESS WITH RETROSPECTIV E EFFECT. THE ASSESSING OFFICER HAS DISALLOWED EXPENDITURE OF THI BALANCE AMOUNT OF MR CESS WHICH COULD NOT BE RECOVERED FROM THE CUTOM ERS, FIRST BY INVOKING SECTION 145A AND THEN BY HOLDING THAT THIS AMOUNT WAS NOT PAYABLE BY THE ASSESSEE. THIS CONTENTION OF THE AO IS INCORRECT BECAUSE THE APPELLANT WAS LEGALLY BOUND TO PAY THE ENHANCED RATE OF MR CESS IRRESPECTIVE OF WHETHER IT WAS ABLE TO RECO VER THE SAME FROM ITS CUSTOMERS. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. SHOORJI VALLABHADAS & CO, (46 ITR 144) HAS HELD THAT IN ANY ACCRUAL SYSTEM, THE PROBABILITY OF IMPROBABILITY OF REALIZA TION HAS ALSO TO BE CONSIDERED IN A REALISTIC MANNER. IN THE CASE OF C HAINRUP SAMPATRAM V. CIT (24 ITR 481) THE HONBLE APEX COURT HELD TH AT WHILE ANTICIPATED LOSS IS TAKEN INTO ACCOUNT, ANTICIPATED PROFIT IS N OT BROUGHT IN ACCOUNT, AS NO PRUDENT TRADER WOULD CARE TO SHOW INCREASED P ROFIT BEFORE ITS ACTUAL REALIZATION. THE ACCOUNTING STANDAR-9 (AS-9 ) IS ALSO IN CONFORMITY WITH THE ABOVE JUDGMENTS. THEREFORE, TH E APPELLANT COULD 71 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NOT HAVE CREDITED RECEIPTS FROM CUSTOMERS ON ACCOUN T OF UNRECOVERED MR CESS. THE PROVISIONS OF SECTION 145A ARE NOT AP PLICABLE IN THE PRESENT CASE BECAUSE THE CESS HAS BEEN LEVIED WITH RETROSPECTIVE EFFECT WHICH COULD NOT BE RECOVERED FROM THE CUSTOMERS. M OREOVER, EXPENDITURE ON ACCOUNT OF MR CESS, PAID TO THE STAT E GOVERNMENT OF RAJASTHAN, IS CLEARLY AN ALLOWABLE EXPENDITURE LIKE OTHER CESS, LEVIES OR INDIRECT TAXES. THEREFORE, THE DISALLOWANCE MADE B Y THE AO IS NOT CORRECT. THE AO IS DIRECTED TO VERIFY WHETHER THE M R CESS OF RS. 60,31,23,017/- HAS BEEN PAID IN ACCORDANCE WITH THE PROVISIONS OF SEC. 43B, AND ALLOW DEDUCTION, ACCORDINGLY. THE LD. CIT(A) DECIDED THE ISSUE BY OBSERVING THAT THE PROVISION OF SECTION 145A ARE NOT APPLICABLE BECAUSE THE CESS HAS BEEN LEVIED WIT H RETROSPECTIVE WHICH COULD NOT BE RECOVERED FROM THE CUSTOMERS. THE FACTUM OF LEV Y OF MR CESS WITH RETROSPECTIVE EFFECT IS NOT CONTROVERTED BY THE REVENUE. THEREFO RE, IN OUR CONSIDERED VIEW, THERE IS NO INFIRMITY INTO THE ORDER OF THE LD. CIT(A) SA ME IS HEREBY AFFIRMED. THIS GROUND OF THE REVENUE IS DISMISSED. 64. GROUND NO. 5 IS GENERAL IN NATURE AND NEEDS NO SEP ARATE ADJUDICATION. 65. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AN D REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. 66. NOW WE TAKE UP ITA NO. 256/JP/2015 & ITA NO. 298/JP /2015 PERTAINING TO THE A.Y. 2011-12. ASSESSEES APPEAL IN ITA NO. 256/JP/2015. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO. 256/JP/2015 PERTAINING TO THE AY 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 72 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 6,61,487/- OUT OF RURAL DEVELOP MENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF M INING AND LEASHOLD LAND OF RS. 14,04,582/-. HE FURTHER ERRED IN DISAL LOWING THIS CLAIM ONLY ON THE BASIS ON THE FINDING OF HIS PREDECESSOR ON T HIS ISSUE IN AY 2010- 11 IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARL IER YEAR UPTO AY 2009- 10 IN REGULAR ASSESSMENT PROCEEDING AND THAT THE CL AIM IS ALSO SUPPORTED BY THE DECISION OF ITAT, HYDERABAD BENCH IN CASE OF NMDC LTD. VS. JCIT IN ITA NO. 714/HYD/ 2012 DT. 28.02.20 14. 3. THE LD. IT(A) HAS ERRED ON FACTS AN IN LAW IN CO NFIRMING THE ACTION OF AO BY HOLDING THAT RECEIPTS FROM SALE OF CERS CANNO T BE CONSIDERED AS INCOME DERIVED FROM THE BUSINESS OF POWER GENERATIO N UNDERTAKING AND THEREFORE DEDUCTION U/S 80IA IS NOT ALLOWABLE O N SUCH RECEIPT. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF DEDUCTION OF RS. 4,69,61,000/- IN RESPECT OF MINE CLOSURE EXPENSES MADE IN COURSE OF ASSESSMENT PROCEEDINGS. HE HAS FURTHER ERRED IN CONFIRMING TH E DISALLOWANCE ONLY ON THE BASIS OF FINDING OF HIS PREDECESSOR IN AY 20 10-11. 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 23,61,30,172/- ON THE BASIS OF TURNOVER OF THE MINI NG ACTIVITY AND WIND POWER GENERATION ACTIVITY FOR ALLOWING DEDUCTION U/ S 80IA ON THE INCOME FROM GENERATION OF POWER IGNORING THE FACT T HAT EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY ;BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 6. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 5,49,980/- OUT OF SOCIAL WELFAR E EXPENSES. 7. THE LD. CIT(A) HAS ERRED ON FATS AND IN LAW IN C ONFIRMING THE DISALLOWANCE OF RS. 6,725/- U/S 14A OF THE IT ACT, 1961. 8. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF THE APPEAL. 9. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 67. GROUND NO. 1, THE FACTS AND GROUND ARE IDENTICAL IN ITA NO. 295 /JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 3. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 73 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NO T RELATABLE TO THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES EE REITERATED THE SUBMISSIONS AD MADE IN THE WRITTEN BRIEF. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF T HE APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 74 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 67.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND O F THE ASSESSEES APPEAL IS DISMISSED. 68. GROUND NO. 2 THE FACTS ARE IDENTICAL IN ITA NO. 253/JP/2015 PER TAINING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVE OF TH E PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 253/JP/2015 AS GROUND NO. 2. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 5.2 PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES SU BMITTED THAT THIS ISSUE WAS BEFORE THIS HONBLE TRIBUNAL IN APPEAL OF THE A SSESSEE PERTAINING TO THE YEAR 2010-11 IN ITA NO. 124/JP/2014. THE HONBLE T RIBUNAL WAS PLEASED TO REJECT THE CLAIM OF THE ASSESSEE. HE SUBMITTED TH AT THE ISSUE OF ALLOWABILITY OF EXPENDITURE IS U/S 37(1) OF THE ACT HAS ALREADY BEEN DECIDED AGAINST THE ASSESSEE. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAS DECIDED THE IS SUE AGAINST THE ASSESSEE. THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDER:- 75 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE 76 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR 77 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N THE TERMS INDICATED HEREINBEFORE. 68.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS DISPOSED OF. 69. GROUND NO. 3 THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 253/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 253/JP/2015 AS GROUND NO. 3. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 6. AT THE TIME OF HEARING GROUND NO. 3 WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, GROUND NO. 3 IS DISMISSED AS NOT PRESSED. 69.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSEE S APPEAL IS DISMISSED AS NOT PRESSED. 78 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 70 . GROUND NO. 4 IS CONFIRMING THE ACTION OF THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS. 4,69,61,000/- IN RESPECT OF MINE C LOSURE EXPENSES MADE IN COURSE OF ASSESSMENT PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER THIS GUIDELINES THE ASSESSEE WAS FASTENED A LIABILITY OF RS. 4,69,61,000/- SUCH LIABILITY WHICH IS AN ASCERTAINE D LIABILITY IS ALLOWABLE UNDER THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASS ESSEE. FOR ALLOWABILITY OF CLAIM OF EXPENDITURE, THERE IS NO REQUIREMENT THAT IT SHO ULD BE DEBITED IN THE BOOKS OF ACCOUNTS FOR THIS PROPOSITION THE LD. COUNSEL FOR T HE ASSESSSEE RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN T HE CASE OF SATLUJ COTTON MILLS VS CIT 116 ITR 1. HE SUBMITTED THAT THE TRIBUNAL I N ASSESSEES OWN CASE PERTAINING TO THE AY 2010-11 HAS DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE. 70.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 70.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE MA TERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS REJECTED THE CLAIM BY FOLLOWING THE DECISION OF HIS PREDECESSOR PERTAINING TO THE AY 2010-11. THE CO-ORDINATE BENC H IN ASSESSEES OWN CASE HAS HELD AS UNDER:- 30.5 FURTHER THE JUDGMENT IN THE MATTER OF BHARAT EARTH MOVERS LTD VS. CIT, 112 TAXMAN 61 (SC) AND CALCUTTA COMPANY LTD, 37 ITR ARE APPLICABLE. BESIDE, IN THE SAID JUDGMENT IT WAS CATEGORICALLY H ELD THAT THE MINES CLOSURE LIABILITY IS A ASCERTAINED LIABILITY. AS PE R MATCHING PRINCIPLE AS WELL AS THE MERCANTILE SYSTEM OF ACCOUNTING, THE LI ABILITY IS ALLOWABLE IN PRINCIPLE UNDER SECTION 37 OF THE ACT. IN VIEW OF THE ABOVE, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED T O GIVE THE BENEFIT OF 79 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. DEDUCTION OF RS. 2,94,04,000/- TOWARDS MINES CLOSUR E EXPENSES IN THE A.Y. 2010-11. THE FACTS ARE IDENTICAL IN THIS YEAR, AS WELL TAKIN G A CONSISTENT VIEW, THE AO IS DIRECTED TO GIVEN BENEFIT OF DEDUCTION OF RS. 4,69, 61,000/- IN RESPECT OF MINE CLOSURE EXPENSES. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 71. GROUND NO. 5 THE FACTS ARE IDENTICAL IN ITA NO. 253/JP/2015 PER TAINING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVE OF THE PA RTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 253/JP/2015 AS GROUND NO. 4. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ASSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. 80 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 71.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE ES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE, AND ISSUE IS RESTORED TO THE F ILE OF AO FOR DECISION AFRESH. 72. GROUND NO. 6, IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 5,49, 980/- CLAIMED AS SOCIAL WELFARE EXPENSES. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND HE SUB MITTED THAT EXPENDITURE WAS INCURRED BY THE ASSESSEE EITHER FOR PUBLICITY OR TO WARD ITS ECONOMIC AND SOCIAL OBLIGATION. HE PLACED RELIANCE ON THE DECISION OF SUPREME COURT RENDERED IN THE CASE OF SHRI VENKATA SATYANARAYANA RICE MILL CONTRA CTORS CO. VS. CIT 223 ITR 101(SC) AND ALSO THE DECISION THE CO-ORDINATE BENCH RENDERED IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. VS. DCIT 96 IT D 186 (MUM.), THE HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT VS. M ADRAS REFINERY LTD. 266 ITR 170 (MAD.) (HC) AND CIT VS. INDIA RADIATORS LTD. 236 IT R 719 (MAD.) (HC). 72.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 72.3 WE HAVE HEARD THE RIVAL CONTENTIONS; WE ARE UNABLE TO ACCEPT THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE EXPEND ITURE IS ALLOWABLE AS THE SAME WAS RELATED TO THE BUSINESS OF THE ASSESSEE. THE A SSESSEE HAS NOT FURNISHED MATERIAL SUGGESTING THAT THESE EXPENSES WERE MADE F OR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS THE AMOUNT U/S 37(1) IS ALLOWABLE O NLY WHEN IT IS EXPENDED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF PURPOSE. THERE FORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A) SAME IS HEREBY AFFIRMED. THIS GROUND IS DISMISSED. 73. GROUND NO. 7, THE FACTS ARE IDENTICAL IN ITA NO. 254/JP/2015 PER TAINING TO THE AY 2008-09. THE RESPECTIVE REPRESENTATIVE OF TH E PARTIES HAVE ADOPTED THE 81 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 254/JP/2015. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 38.3 WE FIND MERIT INTO THE CONTENTIONS OF THE ASS ESSEE THAT ON INVESTMENT OF RS. 1 LAKHS THE ASSESSEE HAD EARNED DIVIDEND IN COME ON RS. 10 LAKHS ONLY IN RESPECT OF THE SHARES OF MAYURA INORGANICS LTD. THIS FACT IS NOT DISPUTED BY THE REVENUE. IN OUR CONSIDERED VIEW, THE OPERATION OF RULE 8D IS NOT AUTOMATIC. THE ASSESSING OFFICER IS REQUIRED TO SA TISFY HIMSELF ABOUT THE CORRECTNESS OF THE CLAIM THAT NO EXPENDITURE WAS IN CURRED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE PRESENT CASE HAS ACCEP TED THAT THERE IS NOT DIRECT NEXUS BETWEEN THE INVESTMENT AND EXPENSES SO INCURR ED. AFTER CONSIDERING THE TOTALITY OF THE FACT AND KEEPING IN VIEW THE SU M OF RS. 1,138/- HAD BEEN DISALLOWED BY INVOKING THE PROVISION OF RULE 8D WIT HOUT BEING SATISFIED ABOUT THE CLAIM OF THE ASSESSEE THAT NO ADMINISTRATIVE EX PENSES WERE INCURRED FOR EARNING OF THE EXEMPT INCOME. WE DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 73.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED. 74. GROUND NO. 8 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 75. GROUND NO. 9 IS PRAYER FOR COST, THE ASSESSEE HAS NOT PLACED AN Y MATERIAL ON RECORD UNDER THE FACTS OF THE PRESENT CASE, WE DO N OT SEE ANY REASON TO AWARD THE COST TO ASSESSEE. HENCE, THIS GROUND IS DISMISSED. 76. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO. 25 6/JP/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE ITA NO. 298/JP/2015 77. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO. 298/JP /2015 PERTAINING TO THE AY 2011-12. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 82 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 20,00,000/- TOWARDS CONTRIBUTION MADE BY THE ASSESSEE TOWARDS STATE REN EWAL FUND. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS. 1,19 ,54,26/- OUT OF EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD RURAL DEVELOPMENT EXPENSES AND RS. 94,43,560/- UNDER THE HEAD AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES WITHOUT APPRECIATING THE FACT THAT THESE EXPENSES HAVE NOT BEEN INCURRED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 3,16,22,808/- MADE BY THE AO ON ACCOUNT OF COMPENSATION PAID TO FARMER S FOR EXCAVATION OF GYPSUM. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 1,75,79,531/- MADE BY THE AO ON ACCOUNT OF PRIOR PERIOD EXPENSES. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE OF RS. 2,81,98,150/- BY HOLDING THAT RECEIPTS FROM SALE OF CARBON EMISSION CERTIFICATES ARE OF CAPITAL IN NATURE. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE U/S 80IA BY NOT APPRECIATING HE FACTS BROUGHT OUT BY THE AO IN ASSE SSMENT ORDER WITH REGARD TO ESTABLISHMENT AND FINANCIAL EXPENSES. 7. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING RS. 32,75,233/- ON ACCOUNT OF MINES DEVELOPMENT EXPENSES. 8. WHETHER ON THE FACTS AN IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE REDUCTION OF R S. 5,79,10,137/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF WRITTEN BACK EXCESS AMORTIZATION. 9. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 78. GROUND NO. 1 IS AGAINST DELETING THE ADDITION OF RS. 20 LAKHS I N RESPECT OF CONTRIBUTION MADE BY ASSESSEE TOWARDS STATE RENEWAL FUND. AT THE OUTSET, THE LD. 83 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. COUNSEL SUBMITTED THAT THIS ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT RENDER ED IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY (2005) 275 ITR 372(RAJ.) 78.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 78.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 2.1 AND 2.2 BY FOLLOWING THE JUDG MENTS OF THE HONBLE HIGH COURT AS UNDER:- 2.1. IN THIS YEAR, THE ASSESSEE HAS CLAIMED EXPENDI TURE OF RS. 20,00,000/- IN RESPECT OF CONTRIBUTION TO STATE RENEWAL FUND. THIS ISSUE ALSO AROSE IN THE CASE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSMENT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II, JAIPUR (APPEAL NO. 325/12-13, DATED 05.1 2.2013) FOR A.Y. 2010-11. THE MAIN POINTS OF THE SUBMISSIONS OF THE APPELLANT , ON THIS ISSUE, HAVE BEEN NARRATED THE ABOVE APPEAL ORDER. THEREFORE, THE AS SESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NA RRATED IN THIS ORDER FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)-II, JAIP UR, HAS HELD AS UNDER- ASSESSING OFFICER DISALLOWED CONTRIBUTION MADE TO S TATE RENEWAL FUND BY TREATING THE SAME AS DIVERSION OF INCOME. HOWEVER, APPELLAN T SUBMITTED THAT THIS ISSUE IS COVERED IN ITS FAVOUR BY THE ORDER OF ITAT. IT IS SEEN THAT SIMILAR ADDITION WAS MADE IN AY 2006-07 IN THE CASE OF THE APPELLANT, BUT IT WAS DECIDED BY HONBLE ITAT BENCH A JAIPUR IN ITA NO. 783/JP/2009 & 740/JP/2009 IN AY 2 006-07 THROUGH ORDER DATED 31.03.2010 IN F AVOUR OF THE APPELLANT, WHERE IN PA RA 15 HONBLE TRIBUNAL RELIED UPON ITS DECISION DATED 22.05.2009 IN CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD, WHEREIN RELYING UPON HONBLE RAJASTHAN HIGH COURT D ECISIONS IN THE CASE OF CIT VS. RAJASTHAN SPINNING AND WEAVING MILLS LTD. 274 ITR 4 65 AND CIT VS. SHRI RAJASTHAN SYNTEX LTD. 221 CTR 410 HELD THAT THE CONTRIBUTION MADE BY THE ASSESSEE TO A PUBLIC WELFARE FUND WHICH IS CONNECTED OR RELATED WITH HIS BUSINESS IS AN ALLOWABLE DEDUCTION U/S 37 AS IT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES. HONBLE TRIBUNAL DISTINGUISHED THE DECISION OF HONBLE RAJA STHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY 275 ITR 372 (RAJ) STATING THAT IN THAT CASE THE AMOUNT WAS SET APART FOR THE SHAREHOLDERS OF THE SOCIETY WHEREAS IN THE 84 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. PRESENT CASE AMOUNT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES AND THE CONTRIBUTION MADE TO STATE RENEWAL FUND WAS FOUND A LLOWABLE U/S 37(1). RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN APPE LLANTS OWN CASE, ADDITION MADE BY THE AO IS DELETED. 2.2 FOLLOWING THE ABOVE ORDER OF THE CIT(A)-II, JAIPUR AND THE ORDER OF ITAT, JAIPUR IN THE CASE OF THE ASSESSEE, THE DISAL LOWANCE MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 78.3 SINCE THE LD. CIT(A) RIGHTLY FOLLOWED THE JUDGMENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE M ARKETING SOCIETY(2005) 275 ITR 372 (RAJ.). WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND IS DISMISSED. 79. GROUND NO. 2, THE FACTS ARE IDENTICAL IN ITA NO. 295/JP/2015 PER TAINING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVE OF TH E PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE 85 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 79.1 FOR THE SAME REASONING, THIS GROUND IS DISMISS ED. 80. GROUND NO. 3, IS AGAINST THE DELETING THE ADDITION OF RS. 3,16,2 2,808/- MADE ON ACCOUNT OF COMPENSATION PAID TO FARMERS. THE LD . DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SU BMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUBMITTED T HAT THE ASSESSING OFFICER HAS RIGHTLY HELD THE EXPENDITURE INCURRED ON COMPENSATION PAID TO THE FARMERS FOR EXCAVATION OF GYPSUM, IS NOT ALLOWABLE, BEING CAPITAL EXPENDITURE . 86 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 80.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THERE IS NO INFIRMITY INTO THE ORDER OF THE LD. CIT(A). 80.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAINING TO AY 2010-11. AGAINST THIS ORDER, THE REVENUE HAD FILED AN APPEAL BEFORE THIS TRIBUNAL IN ITA NO. 144/JP/2014 WHEREIN THE TRIBUNAL WAS PLEASED TO DISMISS THE GRO UND RAISED BY THE REVENUE. THEREFORE, TAKING A CONSISTENT VIEW, FOR THE SAME R EASONING, THE GROUND RAISED IN THIS APPEAL IS ALSO DISMISSED. GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. 81 . GROUND NO. 4, IS AGAINST DELETING THE ADDITION OF RS. 1,75,79,53 1/- ON ACCOUNT OF PRIOR PERIOD EXPENSES. LD. D/R SUPPORTE D THE ORDER OF THE AO. 81.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THIS ISSUE ALSO CROPPED UP IN THE ASSESSMENT YEAR 2010-11 AND MATTER TRAVELED UP TO THE STAGE OF TRIBUNAL WHE REIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE FACTS ARE IDENTICAL IN THIS YEAR ALSO SINCE THE EXPENSES HAVE CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION 81.2 WE HAVE HEARD THE RIVAL CONTENTION, WE HAVE FIND T HAT IN LD. CIT HAS GIVEN FINDING ON FACT IN PARA 6.1 AND 6.2 OF HIS ORDER AS UNDER:- 6.1 IN THIS YEAR, THE ASSESSEE HAS CLAIMED PRIOR PE RIOD EXPENDITURE OF RS. 1,75,79,531/-. THIS ISSUE ALSO AROSE IN THE CAE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSME NT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II , JAIPUR (APPEAL NO. 325/12-13, DATED 05.12.2013) FOR AY 2010-11. THE M AIN POINTS OF THE SUBMISSIONS OF THE APPELLANT, ON THIS ISSUE, HAVE B EEN NARRATED THE ABOVE 87 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. APPEAL ORDER. THEREFORE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NARRATED IN THIS ORDE R FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)-II, JAIPUR, HAS HELD AS UNDE R- FROM THE SUBMISSION OF THE APPELLANT IT IS CLEAR T HAT HONBLE ITAT, JAIPUR BENCH HAS BEEN ALLOWING PRIOR PERIOD EXPENSES IN THE CASE OF VARIOUS GOVERNMENT UNDERTAKINGS IN THE YEAR IN WHICH SUCH EXPENSES ARE FINALLY SANC TIONED AND APPROVED. EVEN IN THE APPELLANTS OWN CASE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT IN AY 2000-01 BY HONBLE JAIPUR BENCH ITAT VIDE ORDER DAT ED 22-12-2006. MY PREDECESSORS HAVE ALLOWED PRIOR PERIOD EXPENSES IN ORDERS DATED 10.08.2011 IN AY 2008-09 AND 18.10.2012 IN AY 2009-10. RESPECTFULLY FOLLOWING HONBLE ITATS ORDER IN THE CASE OF APPELLANT IN AY 2000-01 DATED 22-12- 2006 IN ITA NO. 600/JP/2003, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 4,40,1 13 BECAUSE THE TABLE IN THE APPELLANTS SUBMISSION SHOWS THAT THE LIABILITY FOR THE EXPENSES GOT CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. 6.2 FOLLOWING THE ABOVE ORDER OF CIT(A)-II, JAIPUR AND THE ORDERS OF THE ITAT, JAIPUR, IN THE CASE OF THE ASSESSEE, THE ABOV E DISALLOWANCE IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 81.3 THIS FINDING IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD AND ALSO NO CHANGE INTO FACTS AN D CIRCUMSTANCES IS POINTED OUT. THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS D ISMISSED. 82. GROUND NO. 5, THE GROUND AND FACTS ARE IDENTICAL IN ITA NO. 295/ JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 1. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 12.3 SINCE, THE LD. CIT(A) HAS FOLLOWED THE JUDGME NT OF THE HONBLE ANDHRA PRADESH HIGH COURT RENDERED IN THE CASE OF MY HOME POWER LTD. 365 ITR 82(SUPRA) WHERE THE HONBLE COURT, UNDER THE IDENTI CAL FACTS CONFIRMED THE VIEW OF THE TRIBUNAL IN HOLDING THAT CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVIRONMENTAL CONCERNS. NO ASSET IS GENERATED IN COST OF BUSINESS BUT IT IS GENERATED DUE TO ENVIRON MENTAL CONCERNS. 88 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THEREFORE, ON SALE OF EXCESS CARBON CREDITS CORRECT LY HELD BY THE TRIBUNAL AS A CAPITAL RECEIPT. IN VIEW OF THE JUDGMENT OF HONVB LE ANDHRA PRADESH HIGH COURT, WE DO NOT SEE ANY REASON TO DISTURB THE FIND ING OF LD. CIT(A), SAME IS HEREBY AFFIRMED. THE REVENUE HAS NOT BROUGHT TO OUR NOTICE ANY CONTRARY BIDING PRECEDENT. HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 82.1 FOR THE SAME REASONING, THIS GROUND OF THE REVENUE S APPEAL IS DISMISSED. 83. GROUND NO. 6 THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 295/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015 AS GROUND NO. 2. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 13.2 WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND T HAT THE ASSESSEE HAD ALSO CHALLENGED THE FINDING OF THE LD. CIT(A) ON TH IS ISSUE IN ITA NO. 253/JP/2015 AND WE HAVE RESTORED THE ISSUE TO THE F ILE OF THE ASSESSING OFFICER BY OBSERVING AS UNDER :- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 89 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. 13.3 THEREFORE, IN THE LIGHT OF ABOVE THIS GROUND O F THE REVENUES APPEAL IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. 83.1 FOR THE SAME REASONING THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE AND AO IS DIRECTED TO DECIDED THE ISSUE AFRESH. 84. GROUND NO. 7 IS AGAINST DELETION OF ADDITION OF RS. 32,75,233/- ON ACCOUNT OF MINES DEVELOPMENT EXPENSES. LD. DEPARTMENTAL REPRE SENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 84.1 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPP ORTED THE ORDER OF THE LD. CIT(A). 84.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE MA TERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS GIVEN FINDING ON FACT IN PARA 5 .3 OF HIS ORDER AS UNDER: 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE AO HAS DISALLOWE D MINES DEVELOPMENT EXPENDITURE OF RS. 32,75,233/- ON THE MISTAKEN BELI EF THAT IT PERTAINS TO THE SONARI LIGNITE MINES. THE APPELLANT HAS CLARIFIED THAT THIS EXPENDITURE PERTAINS TO KASANU AND MATASUKH MINES AT NAGOR WHIC H ARE ALREADY OPERATIONAL AND MINES DEVELOPMENT EXPENSES ARE ALLO WABLE U/S 35E. THE APPELLANT HAS STATED THAT IT HAS ITSELF ADDED BACK THE MINE DEVELOPMENT EXPENSES OF SONARI LIGNITE MINES AND THEREFORE, THE RE IS NO QUESTION OF ANY FURTHER DISALLOWANCE. THE CONTENTION OF THE APPELL ANT IS CORRECT. THE AO IS DIRECTED TO DELETE THE DISALLOWANCE OF THE ABOVE MI NE DEVELOPMENT EXPENSES 90 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SINCE IT DOES NOT PERTAIN TO SONARI LIGNITE MINES B UT TO OPERATIONAL MINES WHICH HAVE NOT COMPLETED TEN YEARS OF OPERATIONS. THIS GROUND IS ALLOWED . 84.3 THIS FINDING IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 85. GROUND NO. 8 IS AGAINST ALLOWING THE REDUCTION OF RS. 5,79,10,1 37/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF WRITTEN BACK EXCESS A MORTIZATION. LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE AO. 85.1 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE LD. CIT(A). 85.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT THAT APPELLANT HAS WRITTEN BACK EXCESS AMORTIZATION DURING THE YEAR ON ACCOUNT OF CHANGE IN THE METHOD OF AMORTIZATION AND CREDITED ITS INCOME BY T HIS AMOUNT. AMORTIZATION OF MINING AND LEASEHOLD LAND HAS BEEN DISALLOWED BY TH E AO IN THE PRECEDENT YEAR, WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A). THIS F ACT IS NOT CONTROVERTED BY THE REVENUE. THEREFORE, WE DO NOT SEE ANY REASON TO IN TERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THUS, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 86. GROUND NO. 9 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 87. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. 88. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO. 257/JP/2015 & REVENUES APPEAL IN ITA NO. 299/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2012-13. 91 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE IN THE ASSESSMENT YEAR 2011- 12. ITA NO. 257/JP/2015 89 . FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 257/JP/2015. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 1,30,98,423/- OUT OF RURAL DEVE LOPMENT EXPENSES BY HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXC LUSIVELY FOR THE PURPOSE OF BUSINESS. 2. THE LD. CIT(A) HAS ERRED ON ACTS AND IN LAW IN C ONFIRMING THE DISALLOWANCE OF MINE DEVELOPMENT EXPENSES OF RS. 6, 64,150/- CLAIMED U/S 35E IN RESPECT OF SONARI MINES. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF M INING AND LEASEHOLD LAND OF RS. 25,62,746/-. HE HAS FURTHER ERRED IN D ISALLOWING THIS CLAIM ONLY ON THE BASIS OF THE FINDING OF HIS PREDECESSOR ON THIS ISSUE IN AY 2010-11 IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARLIER YEARS UPTO AY 2009-10 IN REGULAR ASSESSMENT PROCEEDINGS AND TH AT THE CLAIM IS ALSO SUPPORTED BY THE DECISION OF ITAT, HYDERABAD B ENCH IN CASE OF NMDC LTD. VS. JCIT IN ITA NO. 714/HYD/ 2012 DT. 28. 02.2014. 3.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO REDUCE THE EXCESS AMORTIZATION OF MINING/LEASEHOLD LAND OF RS. 5,79,10,137/- WRITTEN BACK IN THE YEAR UNDER CONSID ERATION ON ACCOUNT OF CHANGE IN THE METHOD OF AMORTIZATION UPON THE FI NALIZATION OF APPEAL PROCEEDINGS ON THIS ISSUE INSTEAD OF DIRECTING THE AO TO REDUCE THE SAME IN COMPUTING THE TOTAL INCOME. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN REDUCING THE CLAIM OF DEDUCTION U/S 80IA B Y RS. 2,71,43,220/- BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCO UNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION OF POWER UNITS IS NOT AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WINDM ILLS. 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 27,45,50,244/- ON THE BASIS OF TURNOVER OF THE MINI NG ACTIVITY AND WIND POWER GENERATION ACTIVITY FOR ALLOWING DEDUCTION U/ S 80IA ON THE INCOME FROM GENERATION OF POWER IGNORING THE FACT T HAT EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 6. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF DEDUCTION OF RS. 7,96,71,000/- IN RESPECT OF MINE CLOSURE EXPENSES PROVIDED IN THE BO OKS OF ACCOUNTS. HE HAS FURTHER ERRED IN CONFIRMING THE DISALLOWANCE ONLY ON THE BASIS 92 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. OF FINDING OF HIS PREDECESSOR IN AY 2010-11 AND ALS O ERRED IN NOT ALLOWING THE CLAIM OF MINE CLOSURE EXPENSES MADE IN AY 2010-11 OF RS. 2,49,04,000/- AND IN AY 2011-12 OF RS. 4,69,61,000/ - WHICH IS PROVIDED IN THE BOOKS IN THE YEAR UNDER CONSIDERATI ON BUT DISALLOWED IN THE RESPECTIVE YEARS FOR THE REASON THAT THE SAME I S NOT PROVIDED IN THE BOOKS IN THOSE YEARS. 7. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 4,20,073/- OUT OF SOCIAL WELFAR E EXPENSES. 8. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 35,475/- U/ 14A OF THE IT ACT, 1961. HE HAS FURTHER ERRED IN CONFIRMING THE DISALLOWANCE AT RS. 35,475/- EVEN WHEN THE AMOUNT OF DIVIDEND EARNED IS ONLY RS. 10,000/- 9. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF THE APPEAL. 10. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE . 90. GROUND NO. 1 , IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 1,3 0,98,423/- ON ACCOUNT OF RURAL DEVELOPMENT EXPENSES. WE FIND THA T IDENTICAL GROUND WAS RAISED IN ITA NO. 253/JP/2015 IN ASSESSMENT YEAR 2007-08. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAK E ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REO PENED ASSESSMENT PROCEEDINGS. NOW, COMING TO THE MERIT OF DISALLOWA NCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE ABSENCE OF MATERI AL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANN OT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 90.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED . 93 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 91. GROUND NO. 2, IS AGAINST DISALLOWANCE OF MINE DEVELOPMENT EXPENSE S OF RS. 6,64,150/-. THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION. 91.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 91.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS GIVEN FINDING ON FACT IN PARA 5.3 AS UNDER:- 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE AO HAS DISALLOWED MINES DEVELOPMENT EXPENDITURE OF RS. 6,64,150/- PERTAINING TO THE SON ARI LIGNITE MINES ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT COMMERCIAL PRODUCTION HAS BEEN STARTED IN THESE MINES DURING T HE PREVIOUS YEAR UNDER CONSIDERATION. THE APPELLANT HAS STATED THAT IT HA S FILED A LETTER OF ACCEPTANCE DATED 21.11.2011 FROM ONE M/S DURGA CONSTRUCTION CO ., VODOBARA FOR THE WORK OF RENEWAL OF OVERBURDEN, RAISING AND LOADING OF SALEABLE LIGNITE FORM THESE MINES, TRANSPORTATION ETC. I HAVE EXAMINED THE SUBMISSIONS OF THE APPELLANT AND FIND THAT IT HAS NOT BEEN ABLE TO SHO WN THAT COMMERCIAL PRODUCTION FROM THESE MINES HAVE COMMENCED DURING T HE YEAR UNDER CONSIDERATION. MERE ACCEPTANCE OF A WORK BY A CONT RACTOR DOES NOT ENABLE THE APPELLANT TO DISCHARGE ITS ONUS THAT COMMERCIAL PRODUCTION HAS COMMENCED DURING THE YEAR UNDER CONSIDERATION. THE REFORE, THE DISALLOWANCE OF MINES DEVELOPMENT EXPENSES MADE BY THE AO IS UNH ELD. THIS GROUND IS DISMISSED. 91.3 THIS FINDING IS NOT CONTROVERTED BY THE ASSESSEE BY PLACING ANY CONTRARY MATERIAL ON RECORD AS THE LD. CIT(A) HAS GIVEN FIND ING ON FACT, THAT NO COMMERCIAL PRODUCTION HAD COMMENCED. UNDER THESE FACTS, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THEREFORE, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 94 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 92. GROUND NO. 3 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A SSESSING OFFICER. 92.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 92.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND WE FIND TH AT IDENTICAL GROUND WAS RAISED IN ITA NO. 253/JP/2015. WE HAVE DECIDED THI S GROUND BY OBSERVING AS UNDER:- 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFORE THIS HONBL E TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNAL HAS DECIDED THE IS SUE AGAINST THE ASSESSEE. THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDER:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE ASSES SEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AND I S REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPOSE OF AL LOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATURE OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN 95 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE 96 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE 97 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N THE TERMS INDICATED HEREINBEFORE. 92.3 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSEE IS ALSO DISPOSED OF IN THE TERMS OF THE ABOVE DIRECTION. 92.4 GROUND NO. 3.1 IS AGAINST DIRECTING THE AO TO REDUCE THE EXCESS AM ORTIZATION OF MINING/LEASEHOLD LAND OF RS 5,79,10,137/- WRITTE N BACK IN THE YEAR UNDER CONSIDERATION ON ACCOUNT OF CHANGE IN METHOD OF AMO RTIZATION UPON THE FINALIZATION OF APPEAL PROCEEDINGS ON THIS ISSUE. 92.5 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIVES S UPPORTED THE ORDER OF THE ASSESSING OFFICER. 92.6 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE FIND MERIT INTO THE CONTENTION OF THE LD. COUNSE L FOR THE ASSESSEE WHEN THE LD. CIT(A) HAS ACCEPTED THE CHANGE IN METHOD OF AMORTIZ ATION. HE OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO REDUCE THE SAME I N COMPUTING TOTAL INCOME. THEREFORE, WE DIRECT THE AO TO REDUCED THE EXCESS A MORTIZATION OF MINING AND LEASEHOLD LAND WRITTEN BACK IN THE YEAR UNDER APPEA L. THUS, THE GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 93. GROUND NO. 4 IS AGAINST REDUCING THE CLAIM OF DEDUCTION U/S 80IA BY RS. 2,71,43,220/- BY HOLDING THAT LIQUIDATED DAMAGES RE CEIVED ON ACCOUNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION POWER UNITS IS NO T AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WINDMILLS. THE IDENTICAL GROUND WAS RAISED IN ITA NO. 254/JP/2015 AS GROUND NO. 4. THE PARTIES HAVE ADOPTED THE SAME ARGUMENTS. WE HAVE DECIDED THE ISSUE BY OBSERVING AS UNDER:- 98 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 35.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DISALLOWED THE CLAIM ON THE BASIS THAT THE FIRST DEGREE IN NEXUS WITH THE OPERATION OF THE UNDERTAKING IS M ISSING. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAINING TO THE A.Y. 2010-11. ADMITTEDLY, THIS PAYMENT IS RELATED TO THE CONTRACT BETWEEN THE ASSESSEE AND THE SUPPLIER. THE CONTRACT IS RELATED TO THE WIND MILL INDEPENDENT OF OPERATION OF THE WIND MILL THE PAYMENT OF LIQUIDATE D DAMAGES WOULD NOT ARISE. IT IS ONLY ON THE OPERATION OF THE WIND MIL L AND THE OUTPUT OF THE EQUIPMENT SO INSTALLED THIS LIABILITY OF THE PAYMEN T OF DAMAGES ARISES. IN THE ABSENCE OF OPERATION, THE ISSUE OF PAYMENT O F SUCH DAMAGES WOULD NOT ARISE. IT IS ONLY WHEN THE WIND MILL BEC OMES OPERATIONAL ON SHORT FALL ON THE PRODUCTION SUCH PAYMENT IS MADE. HONB LE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. PRAKASH OILS LTD. (SU PRA) HELD THAT THE PAYMENT MADE AS AN LIQUIDATED DAMAGES FOR NOT HONOURING THE CONTRACT FOR SALE OF OIL AND DEOILED CAKE, SUCH INCOME IS DIRECTLY DERIVED F ROM INDUSTRIAL UNDERTAKING, HENCE ELIGIBLE DEDUCTION U/S 80IA. IN OUR VIEW, THE LD. CIT(A) ERRED IN HOLDING THAT SUCH INCOME IS NOT DERIVED FROM THE BUSINESS O F THE UNDERTAKING. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IA ON THIS RECEIPT. THIS GROUND OF THE ASSESSEES APPEAL IS AL LOWED. 93.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND I S ALLOWED IN THE LIGHT OF OUR DECISION IN PARA 35.3 IN ITA NO. 254/JP/2015 PERTA INING TO AY 2008-09. THE AO IS DIRECTED TO ALLOW THE DEDUCTION U/S 80IA ON THIS RE CEIPT. 94. GROUND NO. 5, IS AGAINST APPORTION THE ESTABLISHMENT AND FINANCI AL EXPENDITURE OF RS. 27,45,50,244/-. WE FIND THAT ID ENTICAL ISSUE WAS RAISED IN ITA NO 253/JP/2015 PERTAINING TO AY 2007-08. WE HAVE DECI DED THIS GROUND BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS 99 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. 94.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSUE IS ALSO ALLOWED FOR STATISTICAL PURPOSE. THE GROUND IS RESTORED TO FILE OF AO FOR DECISION AFRESH IN THE LIGHT OF ABOVE DIRECTION. 95. GROUND NO. 6, IS IN RESPECT OF CONFIRMING THE ACTION OF ASSESSIN G OFFICER IN DISALLOWING THE CLAIM OF RS. 7,96,71,000/- IN RESPE CT OF MINE CLOSURE EXPENSES PROVIDED IN THE BOOKS OF ACCOUNTS. WE FIND THAT IDE NTICAL ISSUE WAS RAISED IN ITA NO 256/JP/2015 PERTAINING TO AY 2011-12. WE HAVE DECI DED THIS GROUND BY OBSERVING AS UNDER:- 70. GROUND NO. 4 IS CONFIRMING THE ACTION OF THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS. 4,69,61,000/- IN RESPECT OF MINE C LOSURE EXPENSES MADE IN COURSE OF ASSESSMENT PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SU BMISSIONS. THE LD. 100 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER THIS GUIDELINES THE ASSESSEE WAS FASTEN A LIABILITY OF RS. 4,69,61,000/- SUCH LI ABILITY WHICH IS AN ASCERTAINED LIABILITY IS ALLOWABLE UNDER THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE. FOR ALLOWABILITY OF CLAIM OF EXPENDIT URE, THERE IS NO REQUIREMENT THAT IT SHOULD BE DEBITED IN THE BOOKS OF ACCOUNTS FOR THIS PROPOSITION THE LD. COUNSEL FOR THE ASSESSSEE RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF SATLUJ COTTON MILLS V S CIT 116 ITR 1. HE SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE PERTAINING TO THE AY 2010- 11 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 70.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 70.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS REJECTED THE CLAIM BY F OLLOWING THE DECISION OF HIS PREDECESSOR PERTAINING TO THE AY 2010-11. THE CO-O RDINATE BENCH IN ASSESSEES OWN CASE HAS HELD AS UNDER:- 30.5 FURTHER THE JUDGMENT IN THE MATTER OF BHARAT EARTH MOVERS LTD VS. CIT, 112 TAXMAN 61 (SC) AND CALCUTTA COMPANY LTD, 37 ITR ARE APPLICABLE. BESIDE, IN THE SAID JUDGMENT IT WAS CATEGORICALLY H ELD THAT THE MINES CLOSURE LIABILITY IS A ASCERTAINED LIABILITY. AS PE R MATCHING PRINCIPLE AS WELL AS THE MERCANTILE SYSTEM OF ACCOUNTING, THE LI ABILITY IS ALLOWABLE IN PRINCIPLE UNDER SECTION 37 OF THE ACT. IN VIEW OF THE ABOVE, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED T O GIVE THE BENEFIT OF DEDUCTION OF RS. 2,94,04,000/- TOWARDS MINES CLOSUR E EXPENSES IN THE A.Y. 2010-11. THE FACTS ARE IDENTICAL IN THIS YEAR, AS WELL TAKIN G A CONSISTENT VIEW, THE AO IS DIRECTED TO GIVEN BENEFIT OF DEDUCTION OF RS. 4,69, 61,000/- IN RESPECT OF MINE CLOSURE EXPENSES. THIS GROUND OF THE ASSESSEES AP PEAL IS ALLOWED. 95.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSUE IS ALSO ALLOWED. THE AO IS DIRECTED TO ALLOW DEDUCTION ON MINE CLOSURE EXPENSE S. 101 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 96. GROUND NO. 7 IS AGAINST THE DISALLOWANCE OUT OF SOCIAL WELFARE E XPENSES. THE FACTS ARE IDENTICAL IN ITA NO. 256/JP/2015 PERTAINI NG TO THE AY 2011-12. THE RESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPT ED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 256/JP/2015 AS GROUND NO. 6. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 72. GROUND NO. 6, IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 5,49,980/-. THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND HE SUBMITTED THAT EXP ENDITURE WAS INCURRED BY THE ASSESSEE EITHER FOR PUBLICITY OR TOWARD ITS ECO NOMIC AND SOCIAL OBLIGATION. HE PLACED RELIANCE ON THE DECISION OF SUPREME COURT RENDERED IN THE CASE OF SHRI VENKATA SATYANARAYANA RICE MILL CONTRACTORS CO . VS. CIT 223 ITR 101(SC) AND ALSO THE DECISION THE CO-ORDINATE BENCH RENDERED IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. VS. DCIT 96 IT D 186 (MUM.), THE HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF C IT VS. MADRAS REFINERY LTD. 266 ITR 170 (MAD.) (HC) AND CIT VS. INDIA RADI ATORS LTD. 236 ITR 719 (MAD.) (HC). 72.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 72.3 WE HAVE HEARD THE RIVAL CONTENTIONS; WE ARE UN ABLE TO ACCEPT THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THA T THE EXPENDITURE IS ALLOWABLE AS THE SAME WAS RELATED TO THE BUSINESS O F THE ASSESSEE. THE ASSESSEE HAS NOT FURNISHED MATERIAL SUGGESTING THAT THESE EXPENSES WERE MADE FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS THE AMOUNT U/S 37(1) IS ALLOWABLE ONLY WHEN IT IS EXPEND WHOLLY AND EXCLUSI VELY FOR THE BUSINESS OF PURPOSE. THEREFORE, WE DO NOT SEE ANY REASON TO IN TERFERE INTO THE ORDER OF THE LD. CIT(A) SAME IS HEREBY AFFIRMED. THIS GROUND IS DISMISSED. 96.1 FOR THE SAME REASONING, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 102 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 97. GROUND NO. 8 THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 254/JP/2015 PERTAINING TO THE AY 2008-09. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 254/JP/2015 WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 38.3 WE FIND MERIT INTO THE CONTENTIONS OF THE AS SESSEE IS THAT ON INVESTMENT OF RS. 1 LAKHS THE ASSESSEE HAS EARNED D IVIDEND INCOME ON RS. 10 LAKHS ONLY IN RESPECT OF THE SHARES OF MAYURA INORG ANICS LTD. THIS FACT IS NOT DISPUTED BY THE REVENUE. IN OUR CONSIDERED VIEW, T HE OPERATION OF RULE 8D IS NOT AUTOMATIC. THE ASSESSING OFFICER IS REQUIRED T O SATISFY HIMSELF ABOUT THE CORRECTNESS OF THE CLAIM THAT NO EXPENDITURE WAS IN CURRED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE PRESENT CASE HAS ACCEP TED THAT THERE IS NOT DIRECT NEXUS BETWEEN THE INVESTMENT AND EXPENSES SO INCURR ED. AFTER CONSIDERING THE TOTALITY OF THE FACT AND KEEPING IN VIEW THE SU M OF RS. 1,138/- HAD BEEN DISALLOWED BY INVOKING THE PROVISION OF RULE 8D WIT HOUT BEING SATISFY ABOUT THE CLAIM OF THE ASSESSEE THAT NO ADMINISTRATIVE EX PENSES WERE INCURRED FOR EARNING OF THE EXEMPT INCOME. WE DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 97.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED. T HE AO IS DIRECTED TO DELETE THE DISALLOWANCE. 98. GROUND NO. 9, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICA TION. 99. GROUND NO. 10, THE FACTS ARE IDENTICAL IN ITA NO. 256/JP/2015 PER TAINING TO THE AY 2011-12. THE RESPECTIVE REPRESENTATIVE OF TH E PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 256/JP/2015 AS GROUND NO. 9. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 75. GROUND NO. 9 IS PRAYER FOR COST, THE ASSESSEE HAS NOT PLACED AN Y MATERIAL ON RECORD UNDER THE FACTS OF THE PRESENT C ASE, WE DO NOT SEE ANY REASON TO AWARD THE COST TO ASSESSEE. THEREFORE, W E DO NOT SEEN ANY REASON 103 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED . 99.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND I S DISMISSED. 100. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 299/JP/2015 101 . NOW, WE TAKE UP REVENUES APPEAL IS ITA NO. 299/J P/2015 PERTAINING TO THE AY 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASES AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 20,00,000/- TOWARDS CONTRIBUTION MADE BY THE ASSESSEE TOWARDS STATE REN EWAL FUND. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS. 11,3 7,196 OUT OF EXPENDITURE INCURRED BY THE ASSESSEE UNDER THE HEAD RURAL DEVELOPMENT EXPENSES AND RS. 50,91,457/- UNDER THE HEAD AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES WITHOUT APPRECIATING THE FACT THAT THESE EXPENSES HAVE NOT BEEN INCURRED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 8,20,55,029/- MADE BY THE AO ON ACCOUNT OF COMPENSATION PAID TO FARMER S FOR EXCAVATION OF GYPSUM. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 1,09,30,255/- MADE BY THE AO ON ACCOUNT OF PRIOR PERIOD EXPENSES. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSE SSEE U/S 80IA AMOUNTING TO RS. 1,37,05,264/- BY NOT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN ASSESSMENT ORDER WITH REGARD TO ES TABLISHMENT AND FINANCIAL EXPENSES. 6. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 102. GROUND NO. 1 , THE GROUND AND FACTS ARE IDENTICAL IN ITA NO. 298 /JP/2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE 104 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 298/JP/2015 AS GROUND NO. 1. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 78.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 2.1 AND 2.2 BY FOLLOWING THE JUDGMENTS OF THE HONBLE HIGH COURT AS UNDER:- 2.1. IN THIS YEAR, THE ASSESSEE HAS CLAIMED EXPENDI TURE OF RS. 20,00,000/- IN RESPECT OF CONTRIBUTION TO STATE RENEWAL FUND. THIS ISSUE ALSO AROSE IN THE CASE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSMENT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II, JAIPUR (APPEAL NO. 325/12-13, DATED 05.1 2.2013) FOR A.Y. 2010-11. THE MAIN POINTS OF THE SUBMISSIONS OF THE APPELLANT , ON THIS ISSUE, HAVE BEEN NARRATED THE ABOVE APPEAL ORDER. THEREFORE, THE AS SESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NA RRATED IN THIS ORDER FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)-II, JAIP UR, HAS HELD AS UNDER- ASSESSING OFFICER DISALLOWED CONTRIBUTION MADE TO S TATE RENEWAL FUND BY TREATING THE SAME AS DIVERSION OF INCOME. HOWEVER, APPELLAN T SUBMITTED THAT THIS ISSUE IS COVERED IN ITS FAVOUR BY THE ORDER OF ITAT. IT IS SEEN THAT SIMILAR ADDITION WAS MADE IN AY 2006-07 IN THE CASE OF THE APPELLANT, BUT IT WAS DECIDED BY HONBLE ITAT BENCH A JAIPUR IN ITA NO. 783/JP/2009 & 740/JP/2009 IN AY 2 006-07 THROUGH ORDER DATED 31.03.2010 IN F AVOUR OF THE APPELLANT, WHERE IN PA RA 15 HONBLE TRIBUNAL RELIED UPON ITS DECISION DATED 22.05.2009 IN CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD, WHEREIN RELYING UPON HONBLE RAJASTHAN HIGH COURT D ECISIONS IN THE CASE OF CIT VS. RAJASTHAN SPINNING AND WEAVING MILLS LTD. 274 ITR 4 65 AND CIT VS. SHRI RAJASTHAN SYNTEX LTD. 221 CTR 410 HELD THAT THE CONTRIBUTION MADE BY THE ASSESSEE TO A PUBLIC WELFARE FUND WHICH IS CONNECTED OR RELATED WITH HIS BUSINESS IS AN ALLOWABLE DEDUCTION U/S 37 AS IT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES. HONBLE TRIBUNAL DISTINGUISHED THE DECISION OF HONBLE RAJA STHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY 275 ITR 372 (RAJ) STATING THAT IN THAT CASE THE AMOUNT WAS SET APART FOR THE SHAREHOLDERS OF THE SOCIETY WHEREAS IN THE PRESENT CASE AMOUNT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES AND THE CONTRIBUTION MADE TO STATE RENEWAL FUND WAS FOUND A LLOWABLE U/S 37(1). RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN APPE LLANTS OWN CASE, ADDITION MADE BY THE AO IS DELETED. 105 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 2.2 FOLLOWING THE ABOVE ORDER OF THE CIT(A)-II, JAIPUR AND THE ORDER OF ITAT, JAIPUR IN THE CASE OF THE ASSESSEE, THE DISAL LOWANCE MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 78.3 SINCE THE LD. CIT(A) RIGHTLY FOLLOWED THE JUDG MENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERAT IVE MARKETING SOCIETY(2005) 275 ITR 372 (RAJ.). WE DO NOT SEE AN Y REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRME D. THIS GROUND IS DISMISSED. 102.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND I S DISMISSED. 103. GROUND NO. 2 IS AGAINST ALLOWING RELIEF QUA THE DISALLOWANCE OF DEVELOPMENT EXPENSES RELATED TO AFFORESTATION, PLANTATION AND E NVIRONMENT. THE FACTS ARE IDENTICAL TO THE FACTS IN ITA NO. 298/JP/2015 PERTA INING TO THE AY 2011-12. THE RESPECTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPT ED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 298/JP/2015 AS GROUND NO. 2. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 79. GROUND NO. 2, THE FACTS ARE IDENTICAL IN ITA NO. 295/JP/2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 295/JP/2015. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER:- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE 106 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 79.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 107 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 103.1 AS THE FINDING OF LD. CIT(A) THAT EXPENSES WERE INCURRED FOR THE BUSINESS PURPOSE IS NOT REBUTTED BY THE REVENUE THEREFORE, T AKING A CONSISTENT VIEW, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 104. GROUND NO. 3, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 298/JP/2015 PERTAINING TO THE AY 2011-12. THE RESPE CTIVE REPRESENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOP TED IN THE ITA NO. 298/JP/2015 AS GROUND NO. 3. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 80. GROUND NO. 3, IS AGAINST THE DELETING THE ADDITION O RS. 3,16,22 ,808/-. THE LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTI FIED IN DELETING THE ADDITION. HE SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY HELD THE EXPENDITURE INCURRED ON COMPENSATION PAID TO THE FA RMERS FOR EXCAVATION OF GYPSUM. 80.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THERE IS NO IN FIRMITY INTO THE ORDER OF THE LD. CIT(A). 80.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAI NING TO AY 2010-11 AGAINST THIS ORDER. THE REVENUE HAD FILED AN APPEAL BEFORE THIS TRIBUNAL IN ITA NO. 144/JP/2014 WHEREIN THE TRIBUNAL HAD DISMISSED THE GROUND RAISED BY THE REVENUE. THEREFORE, TAKING A CONSISTENT VIEW, THE GROUND RAISED IN THIS APPEAL IS ALSO DISMISSED. GROUND NO. 3 OF THE REVEN UES APPEAL IS DISMISSED. 104.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND O F REVENUES APPEAL IS DISMISSED. 108 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 105. GROUND NO. 4, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 298/JP/2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 298/JP/2015 AS GROUND NO. 4. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 81. GROUND NO. 4, IS AGAINST DELETING THE ADDITION OF RS. 1,75,79,53 1/- ON ACCOUNT OF PRIOR PERIOD EXPENSES. LD. D/R SUPPORTE D THE ORDER OF THE AO. 81.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THIS ISSUE ALSO CROPPE D UP IN THE ASSESSMENT YEAR 2010-11 AND MATTER TRAVELED UP TO THE STAGE OF TRIBUNAL. THE FACTS ARE IDENTICAL IN THIS YEAR ALSO SINCE THE EXPENSES HAVE CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. 81.2 WE HAVE HEARD THE RIVAL CONTENTION, WE HAVE FI ND THAT IN LD. CIT HAS GIVEN FINDING ON FACT IN PARA 6.1 AND 6.2 OF HIS OR DER AS UNDER:- 6.1 IN THIS YEAR, THE ASSESSEE HAS CLAIMED PRIOR PE RIOD EXPENDITURE OF RS. 1,75,79,531/-. THIS ISSUE ALSO AROSE IN THE CAE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSME NT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II , JAIPUR (APPEAL NO. 325/12-13, DATED 05.12.2013) FOR AY 2010-11. THE M AIN POINTS OF THE SUBMISSIONS OF THE APPELLANT, ON THIS ISSUE, HAVE B EEN NARRATED THE ABOVE APPEAL ORDER. THEREFORE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NARRATED IN THIS ORDE R FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)-II, JAIPUR, HAS HELD AS UNDE R- FROM THE SUBMISSION OF THE APPELLANT IT IS CLEAR T HAT HONBLE ITAT, JAIPUR BENCH HAS BEEN ALLOWING PRIOR PERIOD EXPENSES IN THE CASE OF VARIOUS GOVERNMENT UNDERTAKINGS IN THE YEAR IN WHICH SUCH EXPENSES ARE FINALLY SANC TIONED AND APPROVED. EVEN IN THE APPELLANTS OWN CASE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT IN AY 2000-01 BY HONBLE JAIPUR BENCH ITAT VIDE ORDER DAT ED 22-12-2006. MY PREDECESSORS HAVE ALLOWED PRIOR PERIOD EXPENSES IN ORDERS DATED 10.08.2011 IN AY 2008-09 AND 18.10.2012 IN AY 2009-10. RESPECTFULLY FOLLOWING HONBLE ITATS ORDER 109 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. IN THE CASE OF APPELLANT IN AY 2000-01 DATED 22-12- 2006 IN ITA NO. 600/JP/2003, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 4,40,1 13 BECAUSE THE TABLE IN THE APPELLANTS SUBMISSION SHOWS THAT THE LIABILITY FOR THE EXPENSES GOT CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. 6.2 FOLLOWING THE ABOVE ORDER OF CIT(A)-II, JAIPUR AND THE ORDERS OF THE ITAT, JAIPUR, IN THE CASE OF THE ASSESSEE, THE ABOV E DISALLOWANCE IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 81.3 THIS FINDING IS NOT CONTROVERTED BY THE REVENU E BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 105.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND I S DISMISSED. 106. GROUND NO. 5, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 PERTAINING TO THE AY 2012-13. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 257/JP/2015 AS GROUND NO. 5. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 94. GROUND NO. 5, IS AGAINST APPORTION THE ESTABLISHMENT AND FINANCI AL EXPENDITURE OF RS. 27,45,50,244/-. WE FIND THAT ID ENTICAL ISSUE WAS RAISED IN ITA NO 253/JP/2015 PERTAINING TO AY 2007-08. WE HA VE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFO RE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK 110 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. 94.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSUE IS ALSO ALLOWED FOR STATISTICAL PURPOSE. THE GROUND IS RESTORED TO FIL E OF AO FOR DECISION AFRESH IN THE LIGHT OF ABOVE DIRECTION . 106.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROUND IS RESTORED TO THE FILE OF AO FOR DECISION AFRESH IN THE LIGHT OF ABOVE DIRECTION . 107. GROUND NO. 6, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 108. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALL OWED FOR STATISTICAL PURPOSE. 109 . NOW WE TAKE UP CROSS APPEALS, IN ITA NO. 1028/JP/2016 (ASSESSEE)PERTAINING TO THE AY 2013-14 & ITA NO. 10 97/JP/2016 (REVENUE) PERTAINING TO THE AY 2013-14 ITA NO. 1028/JP/2016 110. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 1 028/JP/2016 PERTAINING TO THE AY 2013-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 23,95,996/- OUT OF RURAL DEVELO PMENT EXPENSES BY 111 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. HOLDING THAT SAME IS NOT INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF MINE DEVELOPMENT EXPENSES OF RS. 6, 64,150/- CLAIMED U/S 35E IN RESPECT OF SONARI MINES. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING THE CLAIM OF AMORTIZATION OF M INING AND LEASEHOLD LAND OF RS. 1,57,17,105/- AND 8,18,720/- RESPECTIVE LY, IGNORING THAT THIS CLAIM WAS ALLOWED IN ALL EARLIER YEARS UPTO AY 2009 -10 IN REGULAR ASSESSMENT PROCEEDINGS AND THAT THE CLAIM IS ALSO S UPPORTED BY THE DECISION OF ITAT, HYDERABAD BENCH IN CASE OF NMDC L TD. VS. JCIT IN ITA NO. 714/HYD 2012 DT. 28.02.2014. 4. THE LD. CIT(A) HAS ERRED ON FACTS AN IN LAW IN C ONFIRMING THE ACTION OF AO IN REDUCING THE CLAIM OF DEDUCTION OF U/S 80IA B Y RS. 3,92,20,020/- BY HOLDING THAT LIQUIDATED DAMAGES RECEIVED ON ACCO UNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION OF POWER UNITS IS NOT AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WIND MILLS IGNORING THE DECISION OF SUPREME COURT IN CASE OF CIT VS. MEGHAL AYA STEEL 383 ITR 217. 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO APPORTION THE ESTABLISHMENT AND FINANCIAL EXPENDITU RE OF RS. 24,09,78,291/- ON THE BASIS OF TURNOVER OF THE MINI NG ACTIVITY AND WIND POWER GENERATION ACTIVITY FOR ALLOWING DEDUCTION U/ S 80IA ON THE INCOME FROM GENERATION OF POWER IGNORING THE FACT T HAT EXPENDITURE RELATABLE TO POWER GENERATION UNDERTAKING HAS ALREA DY BEEN DEBITED FOR WORKING OUT THE INCOME OF THE SAID UNITS. 6. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 2,77,218/- OUT OF SOCIAL WELFAR E EXPENSES. 7. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 64,225/- U/S 14A OF THE ACT, 19 61. HE HAS FURTHER ERRED IN CONFIRMING THE DISALLOWANCE AT RS. 64,225/ - EVEN WHEN THE AMOUNT OF DIVIDEND EARNED IS ONLY RS. 10,000/- 8. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEND ANY OF THE APPEAL. 9. THE APPROPRIATE COST BE AWARDED TO BE ASSESSEE. 111. GROUND NO. 1 , IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 23, 95,996/-. WE FIND THAT IDENTICAL GROUND WAS RAISED IN ITA NO. 257/JP/2015 AS GROUND NO. 1, PERTAINING TO ASSESSMENT YEAR 2011-12. WE HAVE DEC IDED THIS GROUND BY OBSERVING AS UNDER:- 90. GROUND NO. 1 , IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 1,30,98,423/-. WE FIND THAT IDENTICAL GROUND WAS RA ISED IN ITA NO. 112 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 253/JP/2015 IN ASSESSMENT YEAR 2007-08. WE HAVE DE CIDED THIS GROUND BY OBSERVING AS UNDER:- 8.3 WE DO NOT SEE ANY MERIT INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE OF ALLOWABILITY OF RURAL DEVELOPMENT EXPENSES WAS NOT THE SUBJECT MATTER OF REASON RECORDED. IT IS SETTLED POSITION OF LAW THAT ONCE THE ASSESSMENT IS VALIDLY REOPENED, THE AO CAN ALSO MAK E ASSESSMENT IN RESPECT OF OTHER ISSUES WHICH COME TO NOTICE DURING THE REO PENED ASSESSMENT PROCEEDINGS. NOW, COMING TO THE MERIT OF DISALLOWA NCE, WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON FACT THAT THE AMOUNT WAS NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THIS FINDING ON FACT IS NOT REBUTTED BY THE ASSESSEE. IN THE ABSENCE OF MATERI AL PROVING THE EXPENSES INCURRED FOR THE BUSINESS OF THE ASSESSEE SAME CANN OT BE ALLOWED U/S 37 OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 90.1 FOR THE SAME REASONING, THIS GROUND IS DISMISS ED. 111.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 112. GROUND NO. 2, IS AGAINST DISALLOWANCE OF MINE DEVELOPMENT EXPENS ES OF RS. 6,64,150/-. THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 2 , PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 91. GROUND NO. 2, IS AGAINST DISALLOWANCE OF MINE DEVELOPMENT EXPENSE S OF RS. 6,64,150/-. THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION . 91.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 91.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND T HAT THE LD. CIT(A) HAS GIVEN FINDING ON FACT IN PARA 5.3 AS UNDER :- 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE AO HAS DISALL OWED MINES DEVELOPMENT EXPENDITURE OF RS. 6,64,150/- PERTAININ G TO THE SONARI 113 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. LIGNITE MINES ON THE GROUND THAT THE ASSESSEE HAS N OT BEEN ABLE TO SHOW THAT COMMERCIAL PRODUCTION HAS BEEN STARTED IN THESE MINES DURING THE PREVIOUS YEAR UNDER CONSIDERATION. THE APPELLANT HAS STATED THAT IT HAS FILED A LETTER OF ACCEPTANCE DAT ED 21.11.2011 FROM ONE M/S DURGA CONSTRUCTION CO., VODOBARA FOR THE WO RK OF RENEWAL OF OVERBURDEN, RAISING AND LOADING OF SALEABLE LIGNITE FORM THESE MINES, TRANSPORTATION ETC. I HAVE EXAMINED THE SUBMISSIO NS OF THE APPELLANT AND FIND THAT IT HAS NOT BEEN ABLE TO SHOWN THAT CO MMERCIAL PRODUCTION FROM THESE MINES HAVE COMMENCED DURING THE YEAR UND ER CONSIDERATION. MERE ACCEPTANCE OF A WORK BY A CONT RACTOR DOES NOT ENABLE THE APPELLANT TO DISCHARGE ITS ONUS THAT COM MERCIAL PRODUCTION HAS COMMENCED DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THE DISALLOWANCE OF MINES DEVELOPMENT EXPENSES MADE BY THE AO IS UNHELD. THIS GROUND IS DISMISSED. 91.3 THIS FINDING IS NOT CONTROVERTED BY THE ASSESS EE BY PLACING ANY CONTRARY MATERIAL ON RECORD AS THE LD. CIT(A) HAS G IVEN FINDING ON FACT, THAT NO COMMERCIAL PRODUCTION HAD COMMENCED. UNDER THES E FACTS, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. C IT(A), SAME IS HEREBY AFFIRMED. THEREFORE, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 112.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 113. GROUND NO. 3, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 3 PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 92. GROUND NO. 3 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER. 92.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VES, SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 92.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND WE FIN D THAT IDENTICAL GROUND WAS RAISED IN ITA NO. 253/JP/2015. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 114 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE IDENTICAL ISSUE WAS BEFOR E THIS HONBLE TRIBUNAL IN ITA NO. 124/JP/2014 WHEREIN THE TRIBUNA L HAS DECIDED THE ISSUE AGAINST THE ASSESSEE. THE TRIBUNAL HAS DECIDE D THE ISSUE AS UNDER:- 20.1 THE VEXED QUESTION BEFORE US IS THE AMORTIZATION O F AMOUNT PAID FOR GETTING THE MINING LAND/LEASEHOLD LAND BY THE A SSESSEE. WHETHER IT IS REQUIRED TO BE TREATED AS REVENUE EXPENDITURE AN D IS REQUIRED TO BE ALLOWED U/S 37(1) OF THE ACT OR NOT? FOR THE PURPO SE OF ALLOWING ANY EXPENDITURE, IT IS NECESSARY TO LOOK INTO THE NATUR E OF EXPENDITURE. SECTION 37 OF THE ACT PROVIDES AS UNDER:- SEC. 37(1) : ANY EXPENDITURE (NOT BEING EXPENDITUR E OF THE NATURE DESCRIED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND AGAINST OF BUSINESS OF PROFES SIONS. [EXPLANATION: FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDIT URE.] [(2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE , TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY.] SECTION 37, THEREFORE, CONTEMPLATES THAT IF THE NAT URE OF EXPENDITURE IS NOT THE CAPITAL/PERSONAL IN NATURE, AND IS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THEN IT IS REQUIRED TO BE ALLOWED BY THE AUTHORITY. IN OUR VIEW, THE EXPENDIT URE WHICH WERE INCURRED FOR GETTING THE MINING LAND ON LEASEHOLD BASIS ON M INING BASIS, IS TO BE TREATED AS CAPITAL EXPENDITURE BECAUSE THE LEAS WIL L HAVE THE ENDURING BENEFIT FOR MAKING SUCH AN INVESTMENT. OUR VIEW IS ALSO FO RTIFIED BY THE JUDGMENT OF 115 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. HONBLE SUPREME COURT IN THE MATTER OF ADITYA MINER AL VS. CIT(1999) 8SSC 97 AND ALSO BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE MATTER OF ENTERPRISING ENTERPRISES VS. DCIT IN THE CIVIL APPE AL NO. 5655 OF 2006 WHEREBY HONBLE SUPREME COURT HAS HELD THAT WHERE THE ENTIRE AMOUNT OF LEASE IS PAID EITHER AT A TIME OR IN INSTALLMENT, I T WOULD BE CAPITAL EXPENDITURE. THEREFORE, WE ARE BOUND BY THE JUDGM ENTS PASSED BY THE HONBLE SUPREME COURT. THUS THE EXPENSES LAID BY T HE ASSESSEE FOR THE PURPOSES OF GETTING THE MINING LAND AND LEASEHOLD L AND, ARE REQUIRED TO BE TREATED AS CAPITAL EXPENDITURE. THE AO IS, THEREFO RE, DIRECTED TO TREAT THE AMOUNT PAID FOR GETTING THE MINING LAND AND LEASEHO LD LAND AS CAPITAL EXPENDITURE. THE AO IS FURTHER DIRECTED TO GIVE AL L BENEFITS AS A CAPITAL EXPENDITURE. THE JUDGMENT RELIED UPON BY THE ASSES SEE OF HONBLE SUPREME COURT IN THE MATTER OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS. CIT, 225 ITR 802 IS NOT APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE CASE. HOWEVER, THE JUDGMENT OF HONBLE SUPREME COURT IN T HE MATTER OF ENTERPRISING ENTERPRISES (2007) 160 TAMAN 188 (SC) IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FURTHER THE SAID JUDGMENT IS OF LATER DATE AND, THEREFORE, IS REQUIRED TO BE FOLLOW ED BY THE BENCH. THE JUDGMENT OF NMDC LTD. VS. JCIT (SUPRA) IS NOT APPLI CABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE AS IN THE SAID JUDGMENT TH E ISSUE WAS NOT WITH RESPECT TO APPLICABILITY OF SECTION 37 BUT WAS IN R ESPECT TO ALLOWING THE DEPRECIATION U/S 32 OF THE ACT. THE SUBMISSION OF THE LD. A/R FOR THE ASSESSEE IS THAT THE VALUE OF WASTING ASSET WILL DE PRECIATE WITH THE EXTRACTION OF MINERAL, IN OUR VIEW, IS PREPOSTEROUS. IN OUR V IEW, WITH PASSAGE OF GUIDELINES FOR PROTECTING THE ENVIRONMENT, NOW IT I S THE DUTY OF THE LESSER/ ASSESSEE TO SUBMIT AND EXECUTE THE MINE CLOSING PLA N SO AS TO ENSURE THAT THE LAND IS USED SUBSEQUENT TO THE CLOSURE OF THE MININ G OPERATION. EVEN OTHERWISE, THE MINING ACTIVITY IS DONE NOT ON THE S URFACE OF THE EARTH BUT ON THE CORE TOWARDS THE LOWER SIDE OF THE SURFACE. TH E SURFACE CAN BE PUT TO USE FOR BENEFICIAL PURPOSE AFTER THE TERM OF LEASE/MINI NG ACTIVITY IS OVER AND IT CAN BE EXPLOITED FOR COMMERCIAL PURPOSES BY THE OWNER/A PPROPRIATE AUTHORITY. 116 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE WILL BE DOUBLE TAXED AS THE AO HAS ALREADY COMPLETED THE ASSESSMENT FOR THE A.Y. 2011-12 ON THE BASIS OF THE WRITTEN BACK OF THE AMORTIZATION OF TH E ASSETS AMOUNTING TO RS. 5,79,10,137/-. IN OUR VIEW THE ASSESSEE WAS TAXED ON THE BASIS OF THE SUBMISSIONS MADE BY IT BEFORE THE AO BEFORE THE ASS ESSMENT FOR THE A.Y. 2010-11 IS FINALIZED. THE MERE ACCEPTANCE OF THE M ETHODOLOGY BY THE AO FOR A.Y. 2011-12 WILL NOT WITHHOLD US TO DECIDE THE ISS UE ON MERIT AND IN LAW FOR THE A.Y. 2010-11. AS PER THE LAW AND PRINCIPLE, TH E AUTHORITIES SITUATED IN LOWER LADDER/TIRE OF HIERARCHY IS REQUIRED TO ABIDE LAW/ADJUDICATION DONE BY THE SUPERIOR AUTHORITY. THIS IS ONLY WAY THE JUDIC IAL SYSTEM WORKS. THE AO IS QUASI JUDICIAL AUTHORITY AND BOUND TO FOLLOW THE PR INCIPLE LAID DOWN BY THE TRIBUNAL AND NOT THE VICE VERSA. THEREFORE, THE SU BMISSION OF THE LD. A/R FOR THE ASSESSEE ON THIS COUNT IS ALSO REJECTED. HOWEV ER, IT IS MADE CLEAR THAT THE ASSESEE WOULD BE ENTITLED TO ALL BENEFITS AS AVAILA BLE IN LAW AND THE ASSESSEE WILL NOT BE SUBJECTED TO DOUBLE TAXATION FOR THE A. Y. 2011-12. THE AO IS DIRECTED TO GIVE EFFECT TO THE ABOVE SAID DIRECTION AND NULLIFY THE EFFECT OF DOUBLE TAXATION, IF ANY, AS CLAIMED BY THE ASSESSEE . IN THE LIGHT OF THE ABOVE, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 5.4 THEREFORE, TAKING A CONSISTENT VIEW, APROPOS TO GROUND NO. 2 IS DIRECTED TO TREAT THE EXPENDITURE AS CAPITAL AND GR ANT RELIEF IF ANY AVAILABLE UNDER THE LAW. THUS, GROUND NO. 2 IS DISPOSED OF I N THE TERMS INDICATED HEREINBEFORE. 92.3 FOR THE SAME REASONING, THIS GROUND OF THE ASS ESSEE IS ALSO DISPOSED OF IN TERMS OF THE ABOVE DIRECTION. 113.1 FOR THE SAME REASONING, THIS GROUND OF THE ASSESSE E IS ALSO DISPOSED OF IN TERMS OF THE ABOVE DIRECTION. 114. GROUND NO. 4 , THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 4, PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAV E DECIDED THIS GROUND BY OBSERVING AS UNDER:- 117 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 93. GROUND NO. 4 IS AGAINST REDUCING THE CLAIM OF DEDUCTION U/S 80IA BY RS. 2,71,43,220/- BY HOLDING THAT LIQUIDATED DAMAGE S RECEIVED ON ACCOUNT OF SHORTFALL IN THE MINIMUM GUARANTEED GENERATION POWE R UNITS IS NOT AN INCOME DERIVED FROM THE POWER GENERATION BUSINESS OF WINDM ILLS. THE IDENTICAL GROUND WAS RAISED IN ITA NO. 254/JP/2015 AS GROUND NO. 4. THE PARTIES HAVE ADOPTED THE SAME ARGUMENTS. WE HAVE D ECIDED THE ISSUE BY OBSERVING AS UNDER:- 35.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DISALLOWED THE CLAIM ON THE BASIS THAT THE FIRST DEGREE IN NEXUS WITH THE OPERATION OF THE UNDERTAKING IS M ISSING. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAINING TO THE A.Y. 2010-11. ADMITTEDLY, THIS PAYMENT IS RELATED TO THE CONTRACT BETWEEN THE ASSESSEE AND THE SUPPLIER. THE CONTRACT IS RELATED TO THE WIND MILL INDEPENDENT OF OPERATION OF THE WIND MILL THE PAYMENT OF LIQUIDATE D DAMAGES WOULD NOT ARISE. IT IS ONLY ON THE OPERATION OF THE WIND MIL L AND THE OUTPUT OF THE EQUIPMENT SO INSTALLED THIS LIABILITY OF THE PAYMEN T OF DAMAGES ARISES. IN THE ABSENCE OF OPERATION, THE ISSUE OF PAYMENT O F SUCH DAMAGES WOULD NOT ARISE. IT IS ONLY WHEN THE WIND MILL BEC OMES OPERATIONAL ON SHORT FALL ON THE PRODUCTION SUCH PAYMENT IS MADE. HONB LE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. PRAKASH OILS LTD. (SU PRA) HELD THAT THE PAYMENT MADE AS AN LIQUIDATED DAMAGES FOR NOT HONOURING THE CONTRACT FOR SALE OF OIL AND DEOILED CAKE, SUCH INCOME IS DIRECTLY DERIVED F ROM INDUSTRIAL UNDERTAKING, HENCE ELIGIBLE DEDUCTION U/S 80IA. IN OUR VIEW, THE LD. CIT(A) ERRED IN HOLDING THAT SUCH INCOME IS NOT DERIVE FROM THE BUSINESS OF THE UNDERTAKING. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IA ON THIS RECEIPT. THIS GROUND OF THE ASSESSEES APPEAL IS AL LOWED. 93.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROU ND IS ALLOWED IN THE LIGHT OF OUR DECISION IN PARA 35.3 IN ITA NO. 254/JP/2015 PERTAINING TO AY 2008- 118 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 09, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. T HE AO IS DIRECTED TO ALLOWED DEDUCTION U/S 80IA ON THIS RECEIPT. 114.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED. 115. GROUND NO. 5, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 5 PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 94. GROUND NO. 5, IS AGAINST APPORTION THE ESTABLISHMENT AND FINANCI AL EXPENDITURE OF RS. 27,45,50,244/-. WE FIND THAT ID ENTICAL ISSUE WAS RAISED IN ITA NO 253/JP/2015 PERTAINING TO AY 2007-08. WE HA VE DECIDED THIS GROUND BY OBSERVING AS UNDER 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEF ORE LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS 119 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. 94.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSU E IS ALSO ALLOWED FOR STATISTICAL PURPOSE. THE GROUND IS RESTORED TO FIL E OF AO FOR DECISION AFRESH IN THE LIGHT OF ABOVE DIRECTION. 115.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE AND THE ISSUE IS RESTORED TO FILE OF AO FOR DECISION AFRESH IN LIGHT OF ABOVE DIRECTION 116 . GROUND NO. 6, THE GROUND AND FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 7 PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 96. GROUND NO. 7, THE FACTS ARE IDENTICAL IN ITA NO. 256/JP/2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 256/JP/2015 AS GROUND NO. 6. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 72. GROUND NO. 6, IS AGAINST CONFIRMING THE DISALLOWANCE OF RS. 5,49,980/-. THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF AND HE SUBMITTED THAT EXP ENDITURE WAS INCURRED BY THE ASSESSEE EITHER FOR PUBLICITY OR TOWARD ITS ECO NOMIC AND SOCIAL OBLIGATION. HE PLACED RELIANCE ON THE DECISION OF SUPREME COURT RENDERED IN THE CASE OF SHRI VENKATA SATYANARAYANA RICE MILL CONTRACTORS CO . VS. CIT 223 ITR 120 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 101(SC) AND ALSO THE DECISION THE CO-ORDINATE BENCH RENDERED IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. VS. DCIT 96 IT D 186 (MUM.), THE HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF C IT VS. MADRAS REFINERY LTD. 266 ITR 170 (MAD.) (HC) AND CIT VS. INDIA RADI ATORS LTD. 236 ITR 719 (MAD.) (HC). 72.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 72.3 WE HAVE HEARD THE RIVAL CONTENTIONS; WE ARE UN ABLE TO ACCEPT THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THA T THE EXPENDITURE IS ALLOWABLE AS THE SAME WAS RELATED TO THE BUSINESS O F THE ASSESSEE. THE ASSESSEE HAS NOT FURNISHED MATERIAL SUGGESTING THAT THESE EXPENSES WERE MADE FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS THE AMOUNT U/S 37(1) IS ALLOWABLE ONLY WHEN IT IS EXPEND WHOLLY AND EXCLUSI VELY FOR THE BUSINESS OF PURPOSE. THEREFORE, WE DO NOT SEE ANY REASON TO IN TERFERE INTO THE ORDER OF THE LD. CIT(A) SAME IS HEREBY AFFIRMED. THIS GROUND IS DISMISSED. 96.1FOR THE SAME REASONING, THIS GROUND OF ASSESSEE S APPEAL IS DISMISSED. 116.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 117. GROUND NO. 7, THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 8 PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAV E DECIDED THIS GROUND BY OBSERVING AS UNDER:- 97. GROUND NO. 8 THE FACTS ARE IDENTICAL IN ITA NO. 254/JP/2015 PERTAINING TO THE AY 2008-09. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 254/JP/2015 WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 38.3 WE FIND MERIT INTO THE CONTENTIONS OF THE AS SESSEE IS THAT ON INVESTMENT OF RS. 1 LAKHS THE ASSESSEE HAS EARNED D IVIDEND INCOME ON RS. 10 LAKHS ONLY IN RESPECT OF THE SHARES OF MAYURA INORG ANICS LTD. THIS FACT IS NOT DISPUTED BY THE REVENUE. IN OUR CONSIDERED VIEW, T HE OPERATION OF RULE 8D IS NOT AUTOMATIC. THE ASSESSING OFFICER IS REQUIRED T O SATISFY HIMSELF ABOUT THE 121 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. CORRECTNESS OF THE CLAIM THAT NO EXPENDITURE WAS IN CURRED BY THE ASSESSEE. THE ASSESSING OFFICER IN THE PRESENT CASE HAS ACCEP TED THAT THERE IS NOT DIRECT NEXUS BETWEEN THE INVESTMENT AND EXPENSES SO INCURR ED. AFTER CONSIDERING THE TOTALITY OF THE FACT AND KEEPING IN VIEW THE SU M OF RS. 1,138/- HAD BEEN DISALLOWED BY INVOKING THE PROVISION OF RULE 8D WIT HOUT BEING SATISFY ABOUT THE CLAIM OF THE ASSESSEE THAT NO ADMINISTRATIVE EX PENSES WERE INCURRED FOR EARNING OF THE EXEMPT INCOME. WE DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 97.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED . THE AO IS DIRECTED TO DELETE THE DISALLOWANCE . 117.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED. 118 . GROUND NO. 8 , IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDI CATION. 119 . GROUND NO. 9 , THE FACTS ARE IDENTICAL IN ITA NO. 257/JP/2015 AS GROUND NO. 10 PERTAINING TO THE ASSESSMENT YEAR 2012-13. WE HAV E DECIDED THIS GROUND BY OBSERVING AS UNDER:- 99. GROUND NO. 10, THE FACTS ARE IDENTICAL IN ITA NO. 256/JP/2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRES ENTATIVE OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN THE ITA NO. 256/JP/2015 AS GROUND NO. 9. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 75. GROUND NO. 9 IS PRAYER FOR COST, THE ASSESSEE HAS NOT PLACED AN Y MATERIAL ON RECORD UNDER THE FACTS OF THE PRESENT C ASE, WE DO NOT SEE ANY REASON TO AWARD THE COST TO ASSESSEE. THEREFORE, W E DO NOT SEEN ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED . 99.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS GROU ND IS DISMISSED . 119.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 122 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 120. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 1028/JP/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 1097/JP/2016 121 . NOW, WE TAKE UP REVENUES APPEAL IN ITA NO.1097/JP/2016 PERTAINING TO THE AY 2013-14. THE REVENUE HAS RAISED THE FOLLOWINGS GROUNDS OF AP PEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING TO DELETE ADDITIO N OF RS. 20,00,000/- MADE BY THE AO BY DISALLOWING OF CONTRIBUTION TO ST ATE RENEWAL FUND DESPITE THE FACT THAT IT WAS APPLICATION OF INCOME AND NOT EXPENDITURE INCURRED FOR BUSINESS EXPEDIENCY. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANC E MADE OUT OF RURAL DEVELOPMENT EXPENSES TO RS. 23,95,996/- OUT OF RS. 60,94,904/- DISALLOWED BY THE AO. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE M ADE OUT OF AFFORESTATION, PLANTATION, & ENVIRONMENT EXPENSES O F RS. 53,09,413/-. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE COMPENSATION P AID TO FARMERS AMOUNTING TO RS. 5,43,36,708/- FOR USING THEIR LAND FOR MINERAL EXTRACTION WITHOUT APPRECIATING THE FACT THAT THE E XPENDITURE IS OF CAPITAL IN NATURE. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING DISALLOWANCE OF MINES DEVELOPMENT EXPENSES TO RS. 6,64,150/- AS AGAINST ADDITION OF R S. 33,41,648/- MADE BY AO. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING PRIOR PERIOD EXPENS ES OF RS. 11,43,417/- AS ALLOWABLE EXPENSES EVEN WHEN IT WAS NOT IN ACCOR DANCE WITH THE ACCOUNTING POLICIES FOLLOWED BY THE ASSESSEE. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION OF RS. 8 ,36,54,000/- IN RESPECT OF MINES CLOSURE EXPENSES EVEN THE EXPENDIT URE HAS NOT BEEN DEBITED IN THE BOOKS OF ACCOUNTS. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING EXCESS DEDUCTION U /S 80IA OF RS. 123 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1,19,29,213/- BY REDUCING HEAD OFFICE EXPENSES TOW ARDS THE INCOME DERIVED FROM POWER GENERATING UNDERTAKING. 9. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 2,80,61,921/- AND IN ALLOWING INCOME OF THE ASSESSEE FROM SALE OF CERS A S CAPITAL RECEIPTS. 10. THE APPELLANT CRAVES ITS RIGHT TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 122. GROUND NO. 1, THE GROUND AND FACT ARE IDENTICAL IN ITA NO. 298/JP /2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRE SENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO . 298/JP/2015. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 78. GROUND NO. 1 IS AGAINST DELETING THE ADDITION OF RS. 20 LAKHS T OWARDS CONTRIBUTION MADE BY ASSESSEE TOWARDS STATE RENEWAL FUND. AT THE OUTSET, THE LD. COUNSEL SUBMITTED THAT THIS ISSUE IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY (20 05) 275 ITR 372(RAJ.) 78.1 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 78.2 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND T HAT THE LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 2.1 AND 2.2 BY FOLLOWING THE JUDGMENTS OF THE HONBLE HIGH COURT AS UNDER:- 2.1. IN THIS YEAR, THE ASSESSEE HAS CLAIMED EXPENDI TURE OF RS. 20,00,000/- IN RESPECT OF CONTRIBUTION TO STATE RENEWAL FUND. THIS ISSUE ALSO AROSE IN THE CASE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF THE ASSESSMENT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APPEAL ORDER OF CIT(A)-II, JAIPUR (APPEAL NO. 325/12-13, DATED 05.1 2.2013) FOR A.Y. 2010-11. THE MAIN POINTS OF THE SUBMISSIONS OF THE APPELLANT , ON THIS ISSUE, HAVE BEEN NARRATED THE ABOVE APPEAL ORDER. THEREFORE, THE AS SESSMENT ORDER AND THE 124 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. SUBMISSIONS OF THE APPELLANT ARE NOT BEING AGAIN NA RRATED IN THIS ORDER FOR THE SAKE OF BREVITY. IN AY 2010-11, THE CIT(A)-II, JAIP UR, HAS HELD AS UNDER- ASSESSING OFFICER DISALLOWED CONTRIBUTION MADE TO S TATE RENEWAL FUND BY TREATING THE SAME AS DIVERSION OF INCOME. HOWEVER, APPELLAN T SUBMITTED THAT THIS ISSUE IS COVERED IN ITS FAVOUR BY THE ORDER OF ITAT. IT IS SEEN THAT SIMILAR ADDITION WAS MADE IN AY 2006-07 IN THE CASE OF THE APPELLANT, BUT IT WAS DECIDED BY HONBLE ITAT BENCH A JAIPUR IN ITA NO. 783/JP/2009 & 740/JP/2009 IN AY 2 006-07 THROUGH ORDER DATED 31.03.2010 IN F AVOUR OF THE APPELLANT, WHERE IN PA RA 15 HONBLE TRIBUNAL RELIED UPON ITS DECISION DATED 22.05.2009 IN CASE OF RAJASTHAN STATE SEEDS CORPORATION LTD, WHEREIN RELYING UPON HONBLE RAJASTHAN HIGH COURT D ECISIONS IN THE CASE OF CIT VS. RAJASTHAN SPINNING AND WEAVING MILLS LTD. 274 ITR 4 65 AND CIT VS. SHRI RAJASTHAN SYNTEX LTD. 221 CTR 410 HELD THAT THE CONTRIBUTION MADE BY THE ASSESSEE TO A PUBLIC WELFARE FUND WHICH IS CONNECTED OR RELATED WITH HIS BUSINESS IS AN ALLOWABLE DEDUCTION U/S 37 AS IT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES. HONBLE TRIBUNAL DISTINGUISHED THE DECISION OF HONBLE RAJA STHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERATIVE MARKETING SOCIETY 275 ITR 372 (RAJ) STATING THAT IN THAT CASE THE AMOUNT WAS SET APART FOR THE SHAREHOLDERS OF THE SOCIETY WHEREAS IN THE PRESENT CASE AMOUNT WAS PROVIDED FOR THE BENEFIT OF THE EMPLOYEES AND THE CONTRIBUTION MADE TO STATE RENEWAL FUND WAS FOUND A LLOWABLE U/S 37(1). RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN APPE LLANTS OWN CASE, ADDITION MADE BY THE AO IS DELETED. 2.2 FOLLOWING THE ABOVE ORDER OF THE CIT(A)-II, JAIPUR AND THE ORDER OF ITAT, JAIPUR IN THE CASE OF THE ASSESSEE, THE DISAL LOWANCE MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 78.3 SINCE THE LD. CIT(A) RIGHTLY FOLLOWED THE JUDG MENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JODHPUR CO-OPERAT IVE MARKETING SOCIETY(2005) 275 ITR 372 (RAJ.). WE DO NOT SEE AN Y REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRME D. THIS GROUND IS DISMISSED. 122.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 125 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 123. GROUND NO. 2, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 2 95/JP/2015 AS GROUND NO. 3, PERTAINING TO THE AY 2007-08. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NO T RELATABLE TO THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES EE REITERATED THE SUBMISSIONS AD MADE IN THE WRITTEN BRIEF. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER :- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS 126 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 123.1. FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 124. GROUND NO. 3, THE GROUND AND THE FACTS ARE IDENTICAL IN ITA NO. 295/JP/2015 AS GROUND NO. 3, PERTAINING TO THE AY 2 007-08. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 14. GROUND NO. 3 IS AGAINST DELETING THE DISALLOWANCE IN RESPECT OF RURAL DEVELOPMENT AND AFFORESTATION, PLANTATION AND ENVIR ONMENT EXPENSES OF RS. 127 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 1,76,01,218/-. THE LD. DEPARTMENTAL REPRESENTATIVE S SUPPORTED THE ORDER OF THE ASSESSING OFFICER, HE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE AS THESE EXPENSES WERE NO T RELATABLE TO THE BUSINESS OF THE ASSESSEE. 14.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES EE REITERATED THE SUBMISSIONS AD MADE IN THE WRITTEN BRIEF. 14.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS GIVEN A FINDIN G ON FACT BY OBSERVING AS UNDER :- 6.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICE R HAS DISALLOWED RURAL DEVELOPMENT EXPENSES AMOUNTING TO RS. 2,96,49,172/- AND AFFORESTATION, PLANTATION AND ENVIRONMENT EXPENSES AMOUNTING TO RS. 60,60,487/- ON THE GROUND THAT THESE EXPENSES HAVE BEEN INCURRED FOR A SOC IAL CAUSE AND GENERAL PUBLIC GOOD. THE ASSESSING OFFICER HAS STATED THAT THIS EXPENDITURE HAS NOT BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND THEREFORE, IS NOT AN ADMISSIBLE EXPENDITURE U/S 37 (1) OF THE I. T ACT. THE APPELLANT HAS STATED THAT RURAL DEVELOPMENT EXPENDITU RE HAS BEEN INCURRED ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS FOR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AS WELL AS FOR ORGANIZING ME DICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, MEETING HALLS ETC. IN MY VIEW, THE EX PENDITURE INCURRED BY THE APPELLANT ON REPAIRS OF ROAD AT DIFFERENT MINING AREAS F OR THE SMOOTH TRANSPORTATION OF VEHICLES, STREET LIGHTING AMOUNTING TO RS. 1,76,01,218/- HAS BEEN INCURRED FOR THE PURPOSES OF THE ASSESSEE'S BUSIN ESS AS IT FACILITATES SMOOTH TRANSPORTATION OF MINERALS. DISALLOWANCE OF TH E ABOVE EXPENDITURE IS THEREFORE, DIRECTED TO BE DELETED. THE BALANCE EXPEND ITURE INCURRED UNDER THE HEAD - RURAL DEVELOPMENT EXPENSES, AMOUNTING TO RS. 1,20,47,954/- ON ACCOUNT OF MEDICAL CAMPS, SUPPLY OF SCHOOL BAGS AND STATIONARY ITEMS TO STUDENTS OF RURAL AREAS, CONSTRUCTION OF TEEN SHADES, M EETING HALLS ETC. IS IN THE NATURE OF EXPENDITURE ON CORPORATE SOCIAL RESPONSIBILI TY WHICH HAS NOT BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF TH E APPELLANT'S BUSINESS 128 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. AND IS NOT ALLOWABLE U/S 37 (1) OF THE IT ACT. DIS ALLOWANCE OF THIS EXPENDITURE AMOUNTING TO RS. 1,20,47,954/- IS THEREFORE, UPHELD. 6.4 AS REGARDS, EXPENDITURE DEBITED UNDER THE HEAD - AF FORESTATION, PLANTATION AND ENVIRONMENT EXPENSES, IT IS SEEN FROM THE LEDGER ACCOUNT THAT THIS EXPENDITURE HAS BEEN INCURRED FOR MAINTAINING THE GARDENS AT ITS CORPORATE OFFICE, MINING SITES OFFICES, OBTAINING EN VIRONMENTAL CLEARANCES, OBTAINING MINING AREA LEASE, FEES PAID TO POLLUTION CONTROL BOARD, FOR ASSESSING THE QUALITY OF WATER ETC. THIS EXPENDITURE THEREFORE, HAS BEEN MADE OUT AND EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OFF THE ASSESSEE'S BUSINESS. THE ABOVE DISALLOWANCE IS THEREFORE, DIRECTED TO BE DE LETED. 14 .3 THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AF FIRMED. THE GROUND OF THE REVENUES APPEAL IS DISMISSED. 124.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 125. GROUND NO. 4, THE FACT ARE IDENTICAL IN ITA NO. 298/JP/2015 PERTA INING TO THE AY 2011-12. THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO. 298/JP/201 5. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 80. GROUND NO. 3, IS AGAINST THE DELETING THE ADDITION O RS. 3,16,22 ,808/-. THE LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTI FIED IN DELETING THE ADDITION. HE SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY HELD THE EXPENDITURE INCURRED ON COMPENSATION PAID TO THE FA RMERS FOR EXCAVATION OF GYPSUM, IS NOT ALLOWABLE, BEING CAPITAL EXPENDITURE . 80.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THERE IS NO IN FIRMITY INTO THE ORDER OF THE LD. CIT(A). 129 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 80.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR PERTAI NING TO AY 2010-11. AGAINST THIS ORDER, THE REVENUE HAD FILED AN APPEAL BEFORE THIS TRIBUNAL IN ITA NO. 144/JP/2014 WHEREIN THE TRIBUNAL WAS PLEASED TO DISMISS THE GROUND RAISED BY THE REVENUE. THEREFORE, TAKING A CONSIST ENT VIEW, FOR THE SAME REASONING, THE GROUND RAISED IN THIS APPEAL IS ALSO DISMISSED. GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. 125.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 126. GROUND NO. 5, THE FACT ARE IDENTICAL IN ITA NO. 298/JP/2015 PERTA INING TO THE AY 2011-12. THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO. 298/JP/201 5. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 84. GROUND NO. 7 IS AGAINST DELETION OF ADDITION OF RS. 32,75,233/- ON ACCOUNT OF MINES DEVELOPMENT EXPENSES. LD. DEPARTM ENTAL REPRESENTATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 84.1 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 84.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS GIVEN FINDING ON FACT I N PARA 5.3 OF HIS ORDER AS UNDER: 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE AO HAS DISAL LOWED MINES DEVELOPMENT EXPENDITURE OF RS. 32,75,233/- ON THE M ISTAKEN BELIEF THAT IT PERTAINS TO THE SONARI LIGNITE MINES. THE APPELLANT HAS CLARIFIED THAT THIS EXPENDITURE PERTAINS TO KASANU AND MATASU KH MINES AT NAGOR WHICH ARE ALREADY OPERATIONAL AND MINES DEVELOPMENT EXPENSES ARE ALLOWABLE U/S 35E. THE APPELLANT HAS STATED THAT I T HAS ITSELF ADDED 130 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. BACK THE MINE DEVELOPMENT EXPENSES OF SONARI LIGNIT E MINES AND THEREFORE, THERE IS NO QUESTION OF ANY FURTHER DISA LLOWANCE. THE CONTENTION OF THE APPELLANT IS CORRECT. THE AO IS DIRECTED TO DELETE THE DISALLOWANCE OF THE ABOVE MINE DEVELOPMENT EXPENSES SINCE IT DOES NOT PERTAIN TO SONARI LIGNITE MINES BUT TO OPERATIO NAL MINES WHICH HAVE NOT COMPLETED TEN YEARS OF OPERATIONS. THIS GROUND IS ALLOWED. 84.3 THIS FINDING IS NOT CONTROVERTED BY THE REVENU E BY PLACING ANY ONTRARY MATERIAL ON RECORD. THEREFORE, THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 126.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 127. GROUND NO. 6, THE GROUND AND THE FACT ARE IDENTICAL IN ITA NO. 29 8/JP/2015 PERTAINING TO THE AY 2011-12. THE RESPECTIVE REPRE SENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO . 298/JP/2015. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 81. GROUND NO. 4, IS AGAINST DELETING THE ADDITION OF RS. 1,75,79,53 1/- ON ACCOUNT OF PRIOR PERIOD EXPENSES. LD. D/R SUPPORTE D THE ORDER OF THE AO. 81.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THIS ISSUE ALSO CROPPE D UP IN THE ASSESSMENT YEAR 2010-11 AND MATTER TRAVELED UP TO THE STAGE OF TRIBUNAL WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE FA CTS ARE IDENTICAL IN THIS YEAR ALSO SINCE THE EXPENSES HAVE CRYSTALLIZED IN T HE YEAR UNDER CONSIDERATION. THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION 81.2 WE HAVE HEARD THE RIVAL CONTENTION, WE HAVE FI ND THAT IN LD. CIT HAS GIVEN FINDING ON FACT IN PARA 6.1 AND 6.2 OF HIS OR DER AS UNDER:- 6.1 IN THIS YEAR, THE ASSESSEE HAS CLAIMED PRIOR PE RIOD EXPENDITURE OF RS. 1,75,79,531/-. THIS ISSUE ALSO AROSE IN THE CARE OF APPELLANT IN AY 2010-11 AND EARLIER YEARS. THE MAIN POINTS OF T HE ASSESSMENT ORDER, ON THIS ISSUE, HAVE BEEN NARRATED IN THE APP EAL ORDER OF CIT(A)- II, JAIPUR (APPEAL NO. 325/12-13, DATED 05.12.2013) FOR AY 2010-11. THE MAIN POINTS OF THE SUBMISSIONS OF THE APPELLANT , ON THIS ISSUE, 131 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. HAVE BEEN NARRATED THE ABOVE APPEAL ORDER. THEREFO RE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT ARE NOT BEING AGAIN NARRATED IN THIS ORDER FOR THE SAKE OF BREVIT Y. IN AY 2010-11, THE CIT(A)-II, JAIPUR, HAS HELD AS UNDER- FROM THE SUBMISSION OF THE APPELLANT IT IS CLEAR T HAT HONBLE ITAT, JAIPUR BENCH HAS BEEN ALLOWING PRIOR PERIOD EXPENSES IN THE CASE OF VARIOUS GOVERNMENT UNDERTAKINGS IN THE YEAR IN WHICH SUCH EXPENSES ARE FINALLY SANC TIONED AND APPROVED. EVEN IN THE APPELLANTS OWN CASE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT IN AY 2000-01 BY HONBLE JAIPUR BENCH ITAT VIDE ORDER DAT ED 22-12-2006. MY PREDECESSORS HAVE ALLOWED PRIOR PERIOD EXPENSES IN ORDERS DATED 10.08.2011 IN AY 2008-09 AND 18.10.2012 IN AY 2009-10. RESPECTFULLY FOLLOWING HONBLE ITATS ORDER IN THE CASE OF APPELLANT IN AY 2000-01 DATED 22-12- 2006 IN ITA NO. 600/JP/2003, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 4,40,1 13 BECAUSE THE TABLE IN THE APPELLANTS SUBMISSION SHOWS THAT THE LIABILITY FOR THE EXPENSES GOT CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. 6.2 FOLLOWING THE ABOVE ORDER OF CIT(A)-II, JAIPUR AND THE ORDERS OF THE ITAT, JAIPUR, IN THE CASE OF THE ASSESSEE, THE ABOVE DISALLOWANCE IS DIRECTED TO BE DELETED. THIS GROUND IS ALLOWED. 81.3 THIS FINDING IS NOT CONTROVERTED BY THE REVENU E BY PLACING ANY CONTRARY MATERIAL ON RECORD AND ALSO NO CHANGE INTO FACTS AN D CIRCUMSTANCES IS POINTED OUT. THEREFORE, THIS GROUND OF THE REVENUES APPEA L IS DISMISSED. 127.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 128. GROUND NO. 7, THE GROUND AND THE FACT ARE IDENTICAL IN ITA NO. 25 7/JP/2015 PERTAINING TO THE AY 2012-13. THE RESPECTIVE REPRE SENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO . 257/JP/2015 AS GROUND NO. 6. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDE R:- (95) 95. GROUND NO. 6, IS IN RESPECT OF CONFIRMING THE ACTION OF ASSESSIN G OFFICER IN DISALLOWING THE CLAIM OF RS. 7,96,71,000 /- IN RESPECT OF MINE CLOSURE EXPENSES PROVIDED IN THE BOOKS OF ACCOUNTS. WE FIN D THAT IDENTICAL ISSUE WAS RAISED IN ITA NO 256/JP/2015 PERTAINING TO AY 2011- 12. WE HAVE DECIDED THIS GROUND BY OBSERVING AS UNDER:- 132 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 70. GROUND NO. 4 IS CONFIRMING THE ACTION OF THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS. 4,69,61,000/- IN RESPECT OF MINE C LOSURE EXPENSES MADE IN COURSE OF ASSESSMENT PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SU BMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER THIS GUIDELINES THE ASSESSEE WAS FASTEN A LIABILITY OF RS. 4,69,61,000/- SUCH LI ABILITY WHICH IS AN ASCERTAINED LIABILITY IS ALLOWABLE UNDER THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE. FOR ALLOWABILITY OF CLAIM OF EXPENDIT URE, THERE IS NO REQUIREMENT THAT IT SHOULD BE DEBITED IN THE BOOKS OF ACCOUNTS FOR THIS PROPOSITION THE LD. COUNSEL FOR THE ASSESSSEE RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF SATLUJ COTTON MILLS V S CIT 116 ITR 1. HE SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE PERTAINING TO THE AY 2010- 11 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 70.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 70.2 WE HAVE HEARD THE RIVAL CONTENTION, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS REJECTED THE CLAIM BY F OLLOWING THE DECISION OF HIS PREDECESSOR PERTAINING TO THE AY 2010-11. THE CO-O RDINATE BENCH IN ASSESSEES OWN CASE HAS HELD AS UNDER:- 30.5 FURTHER THE JUDGMENT IN THE MATTER OF BHARAT EARTH MOVERS LTD VS. CIT, 112 TAXMAN 61 (SC) AND CALCUTTA COMPANY LTD, 37 ITR ARE APPLICABLE. BESIDE, IN THE SAID JUDGMENT IT WAS CATEGORICALLY H ELD THAT THE MINES CLOSURE LIABILITY IS A ASCERTAINED LIABILITY. AS PE R MATCHING PRINCIPLE AS WELL AS THE MERCANTILE SYSTEM OF ACCOUNTING, THE LI ABILITY IS ALLOWABLE IN PRINCIPLE UNDER SECTION 37 OF THE ACT. IN VIEW OF THE ABOVE, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED T O GIVE THE BENEFIT OF DEDUCTION OF RS. 2,94,04,000/- TOWARDS MINES CLOSUR E EXPENSES IN THE A.Y. 2010-11. THE FACTS ARE IDENTICAL IN THIS YEAR, AS WELL TAKIN G A CONSISTENT VIEW, THE AO IS DIRECTED TO GIVEN BENEFIT OF DEDUCTION OF RS. 4,69, 61,000/- IN RESPECT OF MINE CLOSURE EXPENSES. THIS GROUND OF THE ASSESSEES AP PEAL IS ALLOWED. 133 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. 95.1 THEREFORE, TAKING A CONSISTENT VIEW, THIS ISSU E IS ALSO ALLOWED. THE AO IS DIRECTED TO ALLOW DEDUCTION OF MINE CLOSURE EXPE NSES. 128.1 FOR THE SAME REASONING, THIS GROUND IS ALSO ALLOWE D, THE AO IS DIRECTED TO ALLOW DEDUCTION OF MINE CLOSURE EXPENSES. 129. GROUND NO. 8, THE GROUND AND FACT ARE IDENTICAL IN ITA NO. 253/JP /2015 PERTAINING TO THE AY 2007-08. THE RESPECTIVE REPRE SENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO . 253/JP/2015 AS GROUND NO. 4. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDE R:- 7.3 WE FIND THAT IN PARA 3 OF THE SUBMISSIONS BEFOR E LD. CIT(A), THE ASSESSEE STATED THAT IN RESPECT OF THE UNALLOCATED EXPENSES OF RS. 15,67,45,594/- THAT NONE OF THESE EXPENSES PERTAIN TO THE 80IA UNDERTAKINGS IN AS MUCH AS THE ENTIRE OPERATION AND THE MAINTENA NCE OF THE POWER PLANT HAD BEEN GIVEN TO SUZLON ENERGIES LTD. THEREFORE, THE ASSESSEE HAD NOT TO INCUR ANY EXPENDITURE ON SALARY/EMPLOYEES BENEFIT, TRAVELLING CONVEYANCE AND OTHER EXPENSES DEBITED UNDER THE VARIOUS HEADS OF E XPENSE IN CORPORATE OFFICE/HEAD OFFICE. NO STRATEGIC PLANNING, DAY TO D AY MANAGEMENT AND SUPERVISION, FINANCIAL MANAGEMENT, MARKETING MANAGE MENT, TENDERING, WORK ALLOCATION, CONTRACT AWARDING, CONTROL ETC. WAS REQ UIRED FOR OPERATING THESE POWER PLANTS BY THE CORPORATE OFFICE/HEAD OFFICE. HENCE, WITHDRAWAL OF DEDUCTION U/S 80IA TO THE EXTENT OF RS. 1,98,91,437 /- ON THIS ACCOUNT IS GROSSLY UNJUSTIFIED. FURTHER, IT IS STATED BY THE ASSESSEE, THE GROUND NO. 4.1 BEFORE THIS TRIBUNAL THAT THIS ISSUE WAS NOT TAKEN WHILE RECORDING THE REASONS FOR ISSUANCE OF NOTICE AND THE SAID DISALLOWANCE IS NOT IN THE NATURE OF INCOME ESCAPING ESSESSMENT AS PER EXPLANATION 3 TO SECTION 147. AFTER CONSIDERING THE TOTALITY OF THE FACT, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER VERIFYING THE CLAIM OF THE A SSESSEE THAT THE ENTIRE EXPENDITURE RELATED TO OPERATION AND MAINTENANCE WA S BORNE BY SUZLON ENERGIES LTD. SO FAR THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT THIS ITEM WAS NOT SUBJECT MATTER OF THE REASONS RECORDED FOR REOPENING. WE DO 134 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. NOT SEE ANY MERIT AS LAW IS WELL SETTLED THAT ONCE REOPENING IS VALID THE AO CAN ALSO CONSIDER THE OTHER ISSUES AS CROPPED UP TH E ASSESSMENT PROCEEDINGS. THUS, GROUND NO. 4 OF THE ASSESSEE S APPEAL IS ALL OWED FOR STATISTICAL PURPOSES. HOWEVER, GROUND NO. 4.1 IS DISMISSED. 129.1 FOR THE SAME REASONING, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 130. GROUND NO. 9, THE FACT ARE IDENTICAL IN ITA NO. 295/JP/2015 PERTA INING TO THE AY 2007-08. THE RESPECTIVE REPRESENTATIVES OF THE PARTIES HAVE ADOPTED THE SAME ARGUMENT AS WERE ADOPTED IN ITA NO. 295/JP/201 5 AS GROUND NO. 1. WE HAVE DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 12.3 SINCE, THE LD. CIT(A) HAS FOLLOWED THE JUDGME NT OF THE HONBLE ANDHRA PRADESH HIGH COURT RENDERED IN THE CASE OF MY HOME POWER LTD. 365 ITR 82(SUPRA) WHERE THE HONBLE COURT, UNDER THE IDENTI CAL FACTS CONFIRMED THE VIEW OF THE TRIBUNAL IN HOLDING THAT CARBON CREDIT IS NOT AN OFFSHOOT OF BUSINESS BUT AN OFFSHOOT OF ENVIRONMENTAL CONCERNS. NO ASSET IS GENERATED IN COST OF BUSINESS BUT IT IS GENERATED DUE TO ENVIRON MENTAL CONCERNS. THEREFORE, ON SALE OF EXCESS CARBON CREDITS CORRECT LY HELD BY THE TRIBUNAL AS A CAPITAL RECEIPT. IN VIEW OF THE JUDGMENT OF HONVB LE ANDHRA PRADESH HIGH COURT, WE DO NOT SEE ANY REASON TO DISTURB THE FIND ING OF LD. CIT(A), SAME IS HEREBY AFFIRMED. THE REVENUE HAS NOT BROUGHT TO OUR NOTICE ANY CONTRARY BINDING PRECEDENT. HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 130.1 FOR THE SAME REASONING, THIS GROUND IS DISMISSED. 131. GROUND NO. 10, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICA TION. 132. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALL OWED FOR STATISTICAL PURPOSE. 133 . IN THE COMBINED RESULT, THE APPEALS OF THE ASSESSEE IN ITA NOS. 253/JP/2015, 769/JP/2016, 254/JP/2015, 255/JP/2015, 256/JP/2015, 257/JP/2015, 1028/JP/2016 PERTAINING TO ASSESSMENT YEARS 2007-08 , 2006-07, 2008-09, 2009-10, 2011-12, 2012-13, 2013-14 ARE PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. & THE 135 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD. APPEALS OF THE REVENUE IN ITA NOS. 295/JP/2015, 296/JP/2015, 297/JP/2015, 298/JP/2015, 299/JP/2015, 1097/JP/2016 PERTAINING T O THE ASSESSMENT YEARS 2007- 08, 2008-09, 2009-10, 2011-12, 2012-13, 2013-14 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND ITA NO. 804/JP/2016 PERTAINING TO THE ASSESSMENT YEAR 2006-07 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 30TH DAY OF MAY 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/05/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S RAJASTHAN STATE MINES & MINE RALS LTD, JAIPUR. 2. THE RESPONDENT- THE ASSTT. COMMISSIONER OF INCOM E-TAX, CIRCLE-6, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NOS. 253&295/JP/2015, 769&804/JP /2016, 254&296/JP/2015, 255&297/JP/2015, 256&298/JP/2015, 257& 299/JP/2015 AND 1028 & 1097/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 136 ITA NO. 253/JP/2015 ALONG WITH 13 OTHER APPEALS. M/S RAJASTHAN STATE MINES & MINERALS LTD.